Justin Varilek: Making a Living by Finding Reporters and Fixers

PHOTO by Courtesy of Justin Varilek
The story behind HackPack

I am 27 years old and originally from Iowa in the US. I studied Russian at Dartmouth College and moved to Moscow in 2011 to work as a journalist. Three years later, I started HackPack, an online platform that connects media outlets and companies with reporters, photographers and videographers in different countries (the company is registered in the US. – Secretmag). HackPack also partners with businesses to promote their events and experts.

I have been working on the project for the past two years, and I have learned to manage an international team as well as collaborate with Russian and international investors. We broke even for the first time in September; then last week I moved to Berlin after the German business incubator Project Flying Elephant offered us €25,000 in investments (the incubator provides Dumbo angel investments in return for 5% in equity. – Secretmag).

Working in Russia

During university, I had to study a foreign language, and I wanted to speak with the largest number of people who didn’t speak English. So I looked at three languages: Chinese, Arabic and Russian. Since many people had studied Arabic after the 9/11 attacks, and Chinese didn’t appeal to me, I went for Russian. Besides, I heard Russian was a challenging language, so I figured that I would be bored. As part of my course, I spent three months at a partner university in St. Petersburg, then another six in Moscow where I studied and interned at the Memorial Human Rights Centre. I was fascinated by the Russian people. After graduating a liberal arts college, I realised that I had no tangible skills for employers other than Russian, so I decided to move to Russia.

I started as a journalist for The Moscow Times; then helped found the communications department at a new university, Skoltech. After that, I was invited to head the US press office of the global software company Acronis and moved to Boston.

The idea of a journalist search tool first took shape after the Ukrainian conflict broke out in 2014. Around that time, the group “Foreign Journalists in Ukraine” appeared on Facebook, where international journalists got in touch with Ukrainian reporters, photographers and fixers and shared professional information like how to pass through checkpoints. This demonstrated how valuable local journalist communities are.

In summer 2014, I talked to several dozen journalists and understood that there was definitely a market for this type of service. I left Acronis in September, gathered my savings, borrowed $20,000 from my relatives and returned to Moscow to launch the project.

The Moscow Startup Life

I knew there were very talented programmers in Russia, and I had no doubts that I would be able to recruit the right team. First, I found two developers, then after six months of work, we launched the project in July 2015.

Due to my connections and demand for material from Ukraine, HackPack started with a focus on Russia and the CIS. We helped journalists and publications trying to attain information from within and looking out, such as editors from St. Petersburg, get in touch with photographers in Chisinau, Moldova, for photos of their protests. The first week after we launched, about 1,000 members submitted requests to join. It turned out very beneficial that we didn’t launch the project internationally at first because we still had many issues to iron out. If users from around the world had signed up for HackPack at that stage, I think they would have left and not returned. But in October, we began marketing the platform to American users.

We started to see major growth in February 2016 after we simplified the platform. And in the past six months, we have had 45% growth in membership. HackPack currently has over 7,000 members in 136 countries – mainly reporters and editors, with some photographers, videographers, PR professionals and experts. About 1,000 of them are Russian. We also have several hundred members each from India, Ukraine and the US.

I have been in contact with many Russian and US media outlets as part of the project and discovered that the problems they experience are similar with a few differences. One of the biggest problems in Russia and the CIS is the bureaucratic obstacles: you need a lot of documents, signatures and stamps to be able to work with freelancers. This year I was contacted by editors who wanted to cover the summer Olympics in Brazil yet they had no idea how they could even pay for that. There are fewer administrative barriers in the US, but it is much harder to trust who they’ll work with; the media outlets need some tools to help them evaluate the candidates before hiring them. Major corporations like BBC have a lot of money and can sustain their presence abroad, but they find it difficult to trust new people in other countries.

Russia journalists media hackpack 1

HackPack makes money from assisting clients find the right content producers, promoting posts and experts and distributing press release. In the next three months we are implementing an online transaction system and will earn revenues from transaction fees.

We are also thinking about introducing a paid-for journalist search tool which will enable PR professionals to search for journalists by location and expertise. However, we currently don’t have enough members to charge for this service. There will be a subscription for media outlets and businesses wishing to better manage their freelancer base and full-time employees.

Smart Money in Berlin

I began fundraising early this year. I wanted to find “smart money,” meaning investors who understand our business and have the right connections, not just cash. I contacted a number of business incubators and investors in Russia, but they didn’t fit us – for different reasons. One business accelerator, for instance, was offering to help Russian projects expand on the global market and interact with Americans. Being an American myself, this wouldn’t be particularly beneficial.

I met with venture capitalists too, but the amounts they were offering were too high. We were seeking tops $400,000; whereas they started investments at half a million, which would mean parting with too much equity.

One thing I found strange about dealing with Russian investors was how quickly they were ready to say: “Great idea – where do I sign?” In the US, the competition among startups is pretty high, so investors are really concerned about their money. Russian investors seemed ready to take greater risks with startups.

I am also speaking with other Russian angel investors and evaluating the possibility of future cooperation. But for now, we’re focusing on building our relationship with the current investor.

An American in Russia

Currently, our team is seven members strong: besides me, we have four members in Russia, one in the US and one in India. Our team is very decentralised, and it is imperative to focus on communication for business to run smoothly. If the team doesn’t know who is responsible for what or that others are working, then priorities are lost, moral drops and we work less efficiently. In our case, there are also cultural differences to consider.

Most kids in the US schools play a lot of team sports, so teamwork is engrained in our culture. In Russia, children don’t play sport in schools, or if they do, it tends to be individual sports like gymnastics, so there tend to be fewer people with good teamwork skills. Also as a result, Americans develop the habit for communicating and sharing everything, while Russians are more reserved. So I have to support the Russian part of the team to communicate more and the American part to cut down on unnecessary talk.

I also noticed that to make things happen in Russia you need face-to-face meetings. This is not as important in the US.

Finally, another thing that I find surprising about Russia is the lack of planning. Russia is innately connected to the culture of the USSR, and the USSR used to be all about the five-year plans. You would expect Russians to be good at planning, but actually they rarely look six months ahead to set goals, identify the methods to achieve them or draft schedules. This is something I had to moderate and work around in various companies.

My move to Berlin, however, has nothing to do with the culture gap. We will continue operations in Russia. But it would be difficult to develop a global project from there: we have to be where our customers and journalists are, so I continue to move.