‘AI will assist in creating a personalized experience for each individual,’ says Alexey Gubarev

AI assistance will play a significant role.
Alexey Gubarev is a multifaceted individual, serving as an entrepreneur, investor, and philanthropist, with an unwavering dedication to Cyprus. His visionary leadership has played a pivotal role in the transformation of Cyprus into a recognized tech hub. Read on to know his thoughts about innovative technologies and its impact on future of healthcare industry.

I believe it's essential to ensure that every position within the company is filled by qualified individuals who can effectively manage teams and deliver results.

Media 7: Please tell us something about your journey. You've been involved in various tech-related roles; how have those experiences influenced your approach as a leader and board member of leading companies?
Alexey Gubarev:
I began my journey in the internet business at the end of the 1990s, around the turn of the century. In 2002, I relocated to Cyprus with my family and my wife. In 2005, me and my two friends established our first company, which eventually evolved into Servers.com, our first major venture in the cloud industry.

When we initially launched the company with a team of five, I assumed the role of Operational Sales Director. Eventually, as the company grew, I found myself serving as a CEO in this capacity for 13 years. I was responsible for overseeing various aspects of the business, essentially becoming the backbone of the company. Notably, I wasn't just the Chief Executive Officer; I was also one of the primary shareholders from the very beginning. This made our situation quite unique; we never sought external capital, and the individuals who initially founded the company also became its primary investors. It was an unconventional setup, but it worked for us. Essentially, we managed to achieve profitability from day one. For many years, we reinvested all our profits back into the business, allowing it to flourish. The fruits of this endeavor culminated in.

A few years before I resigned the CEO position at Servers.com, I made a decision to invest in startups. My first notable investment was in the famous startup Prisma. This was during its peak popularity in 2016, when it became the number one application according to Google and Apple, with over 120 million downloads in a single year.

In 2016, we established the eventual parent company, Palta, as a means to consolidate our investments in various types of applications under one umbrella. This startup venture proved to be quite successful. Currently, our applications boast over 56 million monthly users and more than 5 million subscribers. Our company now employs over 800 people.

M7: Given your role as a co-founder across three organizations, your wealth of experience in running companies is evident. Could you elaborate on your approach to delegation and perhaps share an illustrative instance where your leadership contributed to a company’s growth through acquisitions or partnerships?
AG:
Okay, at Servers.com, I was responsible for sales, and I managed a team that handled several hundred clients. I focused primarily on B2B sales, and it played a significant role in the company.

While sales were crucial, obtaining B2B customers was our top priority, and I excelled in that area. When we initially started the company from scratch, within just six years, we had already generated over $30 million in revenue.

Now, let's talk about leadership within the company, which centers around the individuals working alongside you, day in and day out. This was a key aspect for me. I believe it's essential to ensure that every position within the company is filled by qualified individuals who can effectively manage teams and deliver results.

In the companies we've built, the team has played a significant role in our success. We've had many team members who have stayed with us for many years. This helped us establish several successful companies in a relatively short span of time.

Personally, when it comes to my strengths, I excel in sales and operations. I have a knack for problem-solving, regardless of the region or circumstances. Additionally, I'm adept at making rapid decisions, even when facing hundreds of choices in a single day. I've applied these skills across various companies and situations over time.

M7: Would you like to share the key challenges and milestones as a co-founder of a health tech startup?
AG:
I firmly believe that the most significant challenge lies in market fit. Simply having an idea, no matter how brilliant it may be, doesn't guarantee success unless it's embraced by the market. Over time, we've observed that some companies achieve immediate success because their ideas resonate right from the start. However, for others, it can take one, two, or even three years to truly discover the right product fit. Even if you have a great product idea within a niche market, it's crucial to understand the final product that people will actually use and be willing to consume on a regular basis. The ultimate success of any startup hinges on its audience and how well you can capture and retain them as users of your product. This is our primary focus; we want our products, regardless of their nature, to be genuinely useful to people.

Read more: 'AI is only as smart as the data and the people behind it', says Kyle Ryan 


The ultimate success of any startup hinges on its audience and how well you can capture and retain them as users of your product.

M7: In your opinion, how do content creation, syndication and advertising contribute to the overall success of an organization in terms of brand awareness?
 AG:
Let’s speak about what content is. In an application like Flo, the content consists of articles and helpful information curated for women—that's one content category. Now, let's shift our focus to another type of content in an application like Lensa, which is primarily a photo and video editor. In this case, content involves filters and visual elements. It's a different kind of content because it caters to the specific needs of the users, allowing them to transform their photos in unique ways. Content within an application can vary significantly depending on its nature. It's not just about the information you provide but also about the actions users can take.

Speaking of marketing, there have been significant changes in marketing strategies over the past seven years. We've seen very few products on the market that have been successful without relying on performance marketing. This has presented a considerable challenge. For example, last year, our application Lensa achieved significant success, becoming the number one application worldwide in December 2022. This was a period when we had the opportunity to gain organic traction as people were actively discussing the app. However, achieving such results has become increasingly rare.

It's essential to understand that in today's market, performance marketing is the key to acquiring customers. You need to be effective with your marketing spend, ensuring that the money invested in advertising brings tangible value. Gone are the days when startups could simply acquire a user base without immediate consideration of financial results. Now, it's all about acquiring users while simultaneously generating a positive financial outcome. Your financial performance must cover marketing costs and more. Investors have become more cautious and demand a clearer path to profitability before committing substantial investments. They no longer throw billions of dollars into a project with the hope of future success.

M7: Can you discuss any innovative technologies that you believe will significantly impact the future of health technology?
AG:
In the realm of health technology, we firmly believe that AI assistance will play a significant role. A case in point is the progress we've seen with advanced models like Chat GPT and Facebook's LLaMA, which were recently released.

It's an exceedingly effective means of communication for people, and it's not just our opinion; the market shares this sentiment. I've noticed a shift in preference from voice-based interactions to text-based ones. Many responses are now generated by AI, and this reflects the direction we're headed. Naturally, it will require some time and a focus on delivering precise answers, especially on specific topics, without touching sensitive information. Nevertheless, it's progressing well in providing users with the information they seek.

This is why we believe AI will shape the future. The conventional approach of navigating through applications with buttons and menus has, in my opinion, become too complex for users. People now prefer having a chat-like interface where they can engage in conversation to obtain the information they desire. It's akin to having a personal friend, whether it's for your personal well-being or academic pursuits. It's about having someone who possesses substantial knowledge about your strengths and weaknesses and guides you in areas that require focus. For example, if you struggle with certain exercises, having AI that understands this and can provide tailored advice to help you improve is invaluable. In one of our applications, Zing, we've even introduced a specialized system where your phone monitors your exercise performance, offering real-time feedback. It simplifies the process, making it more accessible.

The distinguishing factor here is personality. Currently, most applications treat users uniformly and lack personalization. However, I believe that in the future, AI will assist in creating a personalized experience for each individual, catering to their unique needs and preferences.

Read more: Q&A with Matthew Sappern, CEO at PeriGen


It's not just about the information you provide but also about the actions users can take.

M7: Funding is a crucial aspect of startup growth. Can you discuss your experience in securing funding and any advice you have for other health tech entrepreneurs seeking investment?
AG:
Now, it's a challenging period to raise capital, which is something every digital company, regardless of its size, must grasp. Often, many people find it extremely difficult, especially when they are far removed from the market or distant from potential investors.

What I believe is essential, depending on the stage you are at, is to clearly communicate and present to your investors when you expect to generate revenue and achieve possible break-even points. Additionally, your marketing model should be cost-effective from the outset. You can't afford to spend money now and hope to recoup it from customers three or four years down the line. You need to ensure that your marketing investments yield returns relatively quickly, typically within one to two years. We no longer have the luxury of extravagant budgets and prolonged spending.

Equally important is having a strong and efficient team. Effectiveness hinges on how well you manage your spending and deliver on your plans. Based on my personal experience, most startups, even those with brilliant ideas, often struggle to gain the trust of potential investors. This is a significant challenge that underscores the importance of consistency. Sometimes, it's better to be a bit more conservative in your projections and present a more realistic picture.
 
It's amusing, especially when you're just starting with an idea, to present your vision precisely. However, it's crucial to understand that in the initial stages, discussing revenue and profitability might not be relevant. Instead, focus on elements like market size and other key factors pertinent to your current stage. Startups must recognize the importance of concentrating on each stage's specific priorities.

Finally, after finding the perfect product, gaining attention through marketing, and establishing a successful business model, you must be precise about your actions. Avoid painting an overly optimistic picture, as it's often unconvincing to potential investors.

M7: What strategies and initiatives does your non-profit organization employ to fulfill its vision of transforming Cyprus into the leading tech hub of Europe?
AG:
Okay, I co-founded the largest association of IT companies in Cyprus, TechIsland, which is a truly unique example. There's no other company or organization with such a wide scope and impact. This has been my passion for many years, and it's why I've dedicated a significant part of my career to it.

In 2020, we had the opportunity to engage with the government and discuss the potential future of the IT sector in Cyprus. It was in 2021 that we officially established the organization with a growing number of members, including both companies and supportive government initiatives. The goal was to explore how Cyprus could contribute to the future of this industry.

Our efforts proved successful. In 2020, the ICT sector's contribution to the GDP was 8.5%, and by 2022, it had nearly doubled up to 13%. This serves as an excellent example of private sector initiatives working hand in hand with the government to attract more companies to the region. When we started, we were just a few people, but now we have 290 member companies, and the number of people working in the ICT sector in Cyprus, specifically in our organization, is around 25,000, and it's growing every day.

We believe that the ICT sector has a bright future in Cyprus. We have a vision, and with the right approach, the right message, and the support of our community, as well as government officials who have been instrumental in our success, we aim to make the ICT sector a key driver of Cyprus's economy in the next five years. 

ABOUT PALTA

Palta is a dynamic collective of Wellbeing and HealthTech brands. It collaborate with visionary entrepreneurs and exceptional individuals to translate groundbreaking concepts into life-enhancing applications that create a meaningful global influence. With a team of more than 700 professionals, it's presence spans across offices in the UK, US, EU, and Israel. To know more please visit; https://palta.com/.

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Palta is a thriving family of Wellbeing and HealthTech brands. We partner with ambitious founders and exceptional talent to transform innovative ideas into life-changing apps that make a positive impact at a global scale. With over 700 employees on board, our offices stretch across the UK, US, EU an...

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