Andrew Zaichenko cover letter 4 Abra CIS & Eastern Europe Network Development

Andrew Zaichenko cover letter Abra CIS & Eastern Europe Network Development

hello, Abra!

It was a long way to get into dream team and there is just one last step now. I strongly believe that this

small step for a man will become giant leap for Abra family and mankind as a whole!

This true confidence is based on my 4.5 years “boiling in” and investigation of blockchain based

ecosystem which I love so much. Love must have no reasons – it is about my beautiful wife

but not about the mission. My love has reasons. It took much time to shape them and get ready

to change my life completely. Those days were spent with lots of benefits in terms of preparing myself

to get into development of the giant leap I have mentioned above. It is about as skills, experience

development (please find CV) and (first of all) getting appropriate knowledge, understanding and skills

in blockchain itself and products/services which were born due to this disruptive technology.

Remittance projects especially.

My mission is to make life more efficient and easy, to cut pain of small/medium business and simple

human beings. It was and it is a core reason to be in one or another project (or to leave it if there was a

lack of life upgrading component). International remittance is a big pain all over the world because of

rates and ID issues mainly. Elegance of the technology, which Abra uses too, has just impressed me

and pushed to develop almost the same scheme your team is using. There are several differences

including total decentralization (which is critically important in terms of compliance and govs’ endless

requests/rules/restrictions) and alternative model of currency exchange mechanics (suggestion is to

let the market decide by his own what the best rate is), which is a dominant and controversial

monetization tool for majority of remittance service companies for the moment.

I love this project and ready to share it for 100% – my developments are yours because I am totally

sure that I speak with people, whose core interest is more about social positive effect, improvement

rather than ROI and other money stuff (which definitely is strongly important too). I am sure that

overwhelming majority of people whose core interest is blockchain has the same priorities. It has its

influence – we tend to serve people but not harvest them. That is a great spirit I strongly intend to

share and promote as a blockchain evangelist! Abra serves people – I love Abra spirit and share it!

Please find below my short analysis of the target region in terms of market opportunities. It is a basis

to develop complete next steps plan as soon as I get the position of CIS & Eastern Europe Network

Development. The aim is to (a) provide your team and a new Global Head of Business Development in

particular with real data to use and (b) show an example of my developments, the way of thinking,

business and analytical skills.

First of all, we need to take into consideration that target region is a source of human resources thus

we should focus on remittance inflows. Next: as we have limited resources (time is #1) there is a need

to make appropriate accents in our expansion plan to enter the most perspective and valuable

countries. According to World Bank (tables below text) there are just 6 countries which provide 50% of

a total inflow within the region and these are Poland, Russia, Ukraine, Hungary, Serbia, Romania.

Each country should be analyzed in terms of inflow channels/sources. E.g. Poland: Germany (31.2%),

United Kingdom (16,9%), United States (13,2%) – 61,2% of total for 2015. Germany has become the

preferred destination for Poles to seek work according to Work Services’s report Polish Economic

Migration (5/2016). It shows that of those respondents who are thinking of emigrating, 34% are

thinking of Germany, 18 % the UK and on the third place is Holland with 6 per cent. Thus we have the

next layer leaders to explore and develop with the highest level of return due to concentration on key

routes. Of course, it is important to look on data in dynamics in a long term to understand trends, to

be ready to find out its reasons – to be ready to face a new market situation fully equipped and armed

(e.g. restrictions and bans on remittances between Ukraine and Russia, USA and Mexico).


Having Germany as the leader within Poland’s remittance inflow we should analyze both in terms of

migrants’ localizations to make a right focus in marketing activity; it is about as setting a

correct coverage for e-marketing campaigns (avoiding fire a cannon at sparrows – keeping high

efficiency of marketing budget), as fixing right regions to spread off-line promo activity, which

is a must part as soon as e-channel will cover potential clients just partially (taking

into consideration percentage of low-qualified personal and people with minimal internet-

activity – there should be in-person communication both with employees and employers too;

compliance which differs from one country to another; of course, we are just the platform

with no assets in our arms but we must provide Teller’s community with maximum support in

compliance area too (here I would like to mention that an ideal situation is that community

becomes self-organized, self-trained and Abra keeps general direction and provides guidelines,

manuals, initiates requests in case of need on behalf of the community),

partners’ network (pay-in, pay-out); here we should concentrate on two directions:

(a) infrastructure – exchanges with appropriate financial partners to cash-in/out, (b) service –

payment providers, postal operators, gas station networks, retail chains etc. (key factors are

operating area, points of sales quantity and clients’ flow); I see small and medium business as

a major partners layer (at the first stage). Of course, there is a need to promote Abra service

among corporate partners, but there should be 100% ready to use compliance basis first of all;

e.g. I had the dialog with Ukrainian logistics market leader – Nova Poshta – which has 2400+

representative offices all over the country. I have provided it with step-by-step plan to develop

payment (for catalog and distance trading companies which use COD as a payment method)

and international remittance solutions (as soon as the company is spreading its activity

internationally). Owner (who was the first contact) and CFO were interested in this concept

development but there was a lack of compliance expertise for that moment and company was

not ready to proceed with such expertise avoiding “to be #1 on a virgin market to attract

government attention”;

that was an example of corporate business reaction – it is inert and conservative. Small and

medium business is flexible, more open to innovation and ready to take risk – we should keep

it in our mind. Of course it does not mean to refuse of corporate partners. Moreover, that was

just one market situation example regarding a certain country with a certain compliance

climate, which is more about CIS but not progressive EU countries. It just will take a little bit

more time and several cases of successful cooperation to ride corporates (and that should be

put into marketing strategy and development timelines).

As soon as we have the target region as a source of workers it means we have just great partners

among local recruiting agencies. Thus we have to develop (a) appropriate list of potential partners

within this area and (b) referral program. The last one can be based on

fixed payment in favor of a certain partner (it can be on the current level of CAC),

%-payment as for a Teller: there will be a need of additional activity but it pays more than

%-payment as for a Partner: of course, there will be no need of additional activity but it pays

significantly less; this one can be used in case of aggressive marketing strategy and depends on

current approaches/policies/investor relationships; this tool will be just perfect to use and

promote within recruiting community through simple examples like:


you (as a recruiter) have 1000 workers turnover a year which means (in average; we will have

our internal statistics soon) 500 USD remittance per month which means 6 000 000 USD

revenue annually and you get (let’s say 0,03%) 1 800 USD per year just for nothing – propose

Abra services to your clients and get your bonuses! Percentage of active users will vary but

cumulative effect will have its positive impact onto recruiter’s income in middle and long term

cooperation (which we are definitely looking for).

Dualistic nature of the platform – which provides both remittance service and possibility to launch

your own business – should be kept on the first row in the dialog with target audience. I am sure we

will have lots of examples when some farm worker or construction specialist will turn into financial

guy, who will provide his farm or construction colleagues with remittance service having it as his major

income source (and that should be highlighted!). Plus people have their families at home with lots of

relatives who are potential Tellers too and possibility to earn extra money is extremely value one in CIS

and Eastern Europe! We will reach this strata as from sender’s side (promoting Abra as a business

within workers’ communities), as from receiver’s side e.g. trough publishing Teller vacancies.

10% of total remittance market is concentrated in CIS and Eastern Europe region. It is a great challenge

I love to be in and take responsibility for, providing my experience, skills, time, efforts and passion as

an investment from my side into Abra service, into Abra team. As CEO I have experience of

bricks’n’mortar service chain launch (28 locations all over the country for 5 months from scratch),

EU representative office and postal operator company launch in Poland from scratch (including

compliance issues, contracting, interacting with local state bodies), WMS development and integration

processes management including communication with clients, clients’ IT teams providing technical

specifications for my development team while onboarding a new client or upgrading current one

services. There were up to 150 team players directly under my management – I love to create the

team which is one of the bases for project success. It is an art to find appropriate team and motivation

as on general level, as personally and it pays so much! It is very important to gather those people

whose mission and values are a part of the project you involve people in. I am sure we have the same!

I am more than excited to be a part of the revolution which Abra is creating nowadays. There are

dramatic changes (and first M&A deals like Ant financial-Moneygram) and total paradigm

transformation within financial services market (and many others). Success and speed of such

transformations depend on us and our ability to “infect” the market. The analytics I have provided you

with is called to make Abra launch successful and fast, efficient in terms of resources (time, money).

Of course, there should be further steps, which includes fixing key markets, compliance issues

investigation (by our own and/or due to third parties’ professional services) and memorandum

development for each country, fixing key partners within infrastructure (e.g. there should be strategic

exchange partners within EU and CIS) and sales partners pool, key markets community development

(launching legal entity and representative office, providing local sites and forums support, keeping

regular webinars and meetings all over the region) and fixing local ambassadors, marketing strategy

development taking into consideration local specifics of each country and demographic group etc.

Dear Abra, dear Bill, dear colleagues, it is not only about "I could have joined Abra!" but "I could have

joined revolution!" and get into the craft of my life. Hawala is a part of a separate culture cluster. I am

cosmopolite and totally sure that humanity should share achievements within itself despite any

religious or any other differences. And we are creating this new era products and services.

Will we change the world? We have been doing already. We are the progress.

Sincerely,

Andrew Zaichenko. Kyiv, 20 / 02 / 2017


Migrant remittance inflows (US$ million)

2008 2009 2010 2011 2012 2013 2014 2015 2016e of total

(%)

Remittances as a share of GDP

in 2015 (%)

Poland 10 475 8 174 7 659 7 712 6 989 7 400 7 409 6 785 6 853 11.9 2.4%

Russian Federation 5 737 5 105 5 250 6 103 5 788 6 751 7 777 6 870 6 339 11.0 1.3%

Ukraine 6 782 5 941 6 535 7 822 8 449 9 667 7 354 5 845 5 468 9.5 11.1%

Hungary 2 522 1 747 2 069 2 785 3 530 4 592 4 656 4 021 4 076 7.1 2.9%

Serbia 3 544 4 648 4 118 3 960 3 549 4 025 3 696 3 371 3 468 6.0 4.3%

Romania 1 702 682 641 694 733 3 519 3 381 2 933 3 013 5.2 1.5%

Uzbekistan 3 007 2 071 2 858 4 276 5 693 6 689 5 828 3 104 2 767 4.8 2.0%

Czech Republic 1 134 1 196 1 229 1 394 1 409 1 738 2 628 2 693 2 747 4.8 10.4%

Slovak Republic 2 050 1 671 1 591 1 753 1 928 2 072 2 395 2 138 2 206 3.8 3.3%

Croatia 2 065 1 890 1 900 2 092 2 085 2 174 2 149 2 104 2 153 3.7 0.1%

Tajikistan 2 544 1 748 2 306 3 060 3 626 4 219 3 384 2 259 2 020 3.5 16.7%

Bosnia and Herzegovina 2 718 2 127 1 822 1 958 1 846 1 947 2 086 1 772 1 831 3.2 25.7%

Kyrgyz Republic 1 223 982 1 266 1 709 2 031 2 278 2 243 1 688 1 545 2.7 5.2%

Bulgaria 1 919 1 592 1 448 1 483 1 449 1 667 1 684 1 443 1 499 2.6 3.3%

Moldova 1 888 1 199 1 351 1 813 1 986 2 192 2 084 1 533 1 490 2.6 3.0%

Armenia 1 904 1 440 1 669 1 799 1 915 2 192 2 079 1 491 1 392 2.4 23.4%

Latvia 1 920 1 585 1 258 1 505 1 499 1 605 1 774 1 416 1 376 2.4 1.4%

Georgia 1 065 1 112 1 184 1 547 1 770 1 945 1 986 1 459 1 371 2.4 1.6%

Lithuania 1 565 1 239 1 673 1 954 1 508 2 060 2 113 1 374 1 355 2.4 0.5%

Azerbaijan 1 518 1 255 1 410 1 893 1 990 1 733 1 846 1 270 1 192 2.1 9.2%

Kosovo 1 042 1 055 997 1 122 1 059 1 122 1 192 1 068 1 084 1.9 2.5%

Slovenia 380 329 347 489 645 700 771 729 750 1.3 1.7%

Belarus 583 504 575 891 1 053 1 214 1 231 696 658 1.1 28.8%

Estonia 362 340 357 438 461 568 544 446 433 0.8 0.0%

Macedonia, FYR 407 381 388 434 394 376 367 307 316 0.5 6.5%

Kazakhstan 126 198 226 180 178 207 229 184 172 0.3 4.7%

Turkmenistan 50 34 35 35 37 40 30 16 14 0.0 0.8%

60 235 50 245 52 164 60 900 63 600 74 691 72 916 59 011 57 587

Source: World Bank staff calculation based on data from IMF Balance of Payments Statistics database and data releases from central banks, national statistical agencies, and World

Bank country desks; GDP data is from WDI.


Poland remittance inflow source country (US$ million)

% of total

2015 2014 2013

Germany 31.2 2114 2224 2177

United Kingdom 16.9 1144 1202 1174

United States 13.2 895 943 926

Canada 5.1 343 360 354

Ukraine 3.5 238 250 244

Italy 3.2 219 230 226

Ireland 2.9 199 209 203

France 2.8 189 199 195

Netherlands 2.1 143 150 146

Norway 2.1 141 149 147

Sweden 2.0 138 145 142

Spain 1.8 125

Belgium 1.8 119

Austria 1.6 111

Australia 1.6 110

Israel 1.5 103

Denmark 0.8 54

Switzerland 0.7 47

Russian Federation 0.7 46

Kazakhstan 0.7 45

Czech Republic 0.6 44

Uzbekistan 0.6 37

Greece 0.3 19

Iceland 0.2 16

South Africa 0.2 15

Moldova 0.2 14

Argentina 0.2 11

Turkey 0.1 8

Azerbaijan 0.1 8

Slovak Republic 0.1 8

Hungary 0.1 7

Lithuania 0.1 6

Finland 0.1 6

Kyrgyz Republic 0.1 6

Brazil 0.1 6

Turkmenistan 0.1 6

Luxembourg 0.1 5

Georgia 0.1 5

etc.

Source: World Bank staff calculation based on data from IMF Balance of Payments Statistics database and data releases from

central banks, national statistical agencies, and World Bank country desks.

Andrew Zaichenko cover letter 4 Abra CIS & Eastern Europe Network Development

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