How to Become a Businessman

Oleg Tinkov

Audio by Paper2Audio.

How to become a businessman

Introduction

I started writing this book, codenamed "How to Make a Million," in Phuket, Thailand, on November 4, 2010, immediately realizing I needed a more original title. I'm not sure how much more original "How to Become a Businessman" turned out to be—but it's certainly more specific. That's exactly what you'll read about in this book.

If my first book, “I'm Like Everyone Else,” contained very little practical advice, then in this one I've tried to tell you everything I know about business, and everything that allowed me to create five successful businesses in a wide variety of areas—electronics sales, frozen food production, a restaurant chain, breweries, and a bank.

I've tried to provide examples from all my businesses to make the presentation clear. I'll be very happy if my book helps you avoid at least some of the mistakes—I'm deeply convinced that they're unavoidable in business.

Chapter 1

Why Entrepreneurship is Important for Social Development

Entrepreneurship is undoubtedly the engine of progress. Over the past 200 years, humanity hasn't seen a single more or less successfully developing country where businessmen didn't play a driving role. The key words in entrepreneurship are change, create, and build.

An entrepreneur is someone who thinks about how to make things better, how to adapt them, and how to benefit society. It's important for them to develop, dream, and create something new. More traditional people value different verbs: maintain, don't change, don't do.

For them, stability is paramount; they prefer not to take risks, to do little or nothing, to maintain a certain status quo so that everything remains as it is. This is the fundamental difference.

An entrepreneur's job is to change, innovate, grow, and imagine. Such people are a distinct minority; they stand out from the crowd, like black sheep or yellow parrots—whatever you prefer. Estimates put them at between 1 and 10 percent.

population. There is even an opinion that their number is negligible: 0.5 percent, that is, only one in 200. In a number of countries, which, unfortunately, include Russia, businessmen are a major source of irritation. Ordinary people do not understand that people are businessmen, although and pursue their material goals, make a revolution, change society, move it forward, while the majority, at best, restrains what advanced, creative people have come up with, and at worst, contributes to regression.

I repeat, entrepreneurs are the main social group that moves humanity forward. I am very happy to feel part of this group, which is not indifferent, not uninterested in what is happening in society, and which is constantly trying change something.

An entrepreneur must be free. The more freedom there is, the more freedom there is in society.

entrepreneurship. We see this in the United States. There, personal freedoms are elevated to some kind of absolute.

And not just political freedoms, but freedoms in the human sense. No one

It doesn't interfere, no one interferes, a person relies only on himself, the state interferes in a person's life to a minimum, if he doesn't want it.

We don't know of another country with such a level of entrepreneurship development, with such number of startups. I recently saw a list of the 50 most successful startups of the last ten years. 48 of them were from the

U.S, and two more were from Norway and Denmark. The statistics speak for themselves.

For some reason, politicians of totalitarian, patriarchal regimes see the entrepreneur as enemy. They believe (perhaps not without reason) that a free, thinking person is dangerous to them, and this unnerves them. As Viktor Tsoi said: "Stop! The danger zone is the work of the brain." But it seems to me that an entrepreneur isn't really that concerned with political freedoms. Rather, he's interested in ordinary, universal human freedoms—freedom of choice, movement, expression, and so on. So that no one interferes with you, tells you how to live, or forces you to go to a demonstration. I don't know why politicians in In most underdeveloped countries, entrepreneurs are so annoying—they mean no harm. I've seen very few entrepreneurs interested in politics.

What qualities should an entrepreneur possess? The key ones are courage and the ability to take and manage risk.

I think these qualities are essential and should be innate. It is desirable to have Intuition, as well as the ability to think quickly and make decisions quickly—these are acquired skills. Studying at the Faculty of Mechanics and Mathematics at Moscow State University or the Moscow Institute of Physics and Technology will help develop these skills. Thus, desirable qualities are acquired or nurtured, while essential ones must be innate.

If any of the readers did not find the required qualities in themselves, I just Even if he has all the qualities listed above, he should still try to start his own business. Only after trying will you realize you've failed. I personally know several well-known entrepreneurs who lacked the aforementioned qualities.

Their second half—the analytical, or desirable, half—was so well developed that it compensated for the shortcomings of the first, essential half—namely, a strong nervous system for accepting and sustaining risks. I've also known people who certainly didn't qualify as entrepreneurs based on the qualities I've described, but in fact, they built good companies and earned millions of rubles and even millions of dollars. So, it's worth taking a chance on them, too.

Perhaps, having read this far in my book, you categorically reject everything I've said so far. You think it's written by a strange person and don't share his views and beliefs. Then you should put the book aside. Firstly, I'll only irritate you more from here. Secondly, you're definitely not an entrepreneur and you don't need any of this.

It's a great shame you're mediocre, but on the other hand, such people are also needed as a deterrent. We move things along, you clean up, no big deal. I don't see anything offensive in the word "mediocrity." In English, it's called mediocrity.

This isn't a scoundrel, not a scoundrel, not a brute, not a thief, not a bandit, not a murderer. This is a person of average stature. abilities—between talented dreamers and complete scumbags. You're in the middle, and that's not bad. You maintain balance in the world. Don't worry, just put the book down.

Chapter 2 How to choose a business idea

It all depends on the person, of course. I think it's best to choose a field you understand or are currently working in. On the other hand, I'm already in my fifth business—banking—which is completely unrelated to the previous four. I just always

I found good niches, although I didn't understand anything about them.

I filled a neesh by buying and selling V.C.R's. In 1991, I needed a VCR and couldn't find one anywhere. I ended up buying a Sharp, paying three times more. Realizing the profitability, I started working in electronics.

My daughter Daria loved pelmeni. Back then, pelmeni were made "for the masses" (I don't like that word), but I decided to make a product "for the people," so I could enjoy them myself. My pelmeni were more expensive, for people with average incomes, but they were high-quality.

Then I couldn't get a tasty beer anywhere, there were queues everywhere - and I opened brewery restaurant. I liked unfiltered and unpasteurized beer, so I brewed it myself.

I really loved credit cards, but in Russia I couldn't find a bank that didn't force me to use them. I went to the branch and got a card with the design I needed. I created my own credit card bank.

An important component of all five of my businesses is super profitability, all of them brought in 200 to 400 percent profit or markup.

On the one hand, it's better to focus on improving the business you're in now.

you're in. On the other hand, if you see another category, even one unfamiliar to you, but you feel like you're an entrepreneur, a visionary, and a lucky person, just go there. That's exactly what I did. I knew nothing about video trading, nothing about dumplings, beer was a dark forest for me, I didn't even know how it fermented. I thought beer was made like vodka: they take alcohol and mix it with something. Having invested my first

When I was about to invest money in a banking project, I didn't really know a single term or understand the Central Bank's requirements. No problem. If you have the will, the desire, and the imagination, go into a business that seems profitable and interesting to you personally. You don't have to know everything about it.

know thoroughly.

Is it necessary to conduct a market analysis? In my opinion, a true entrepreneur

You have to do your market analysis on a piece of paper. If your analysis doesn't fit on a restaurant napkin, there's no business there. McKinsey and Boston Consulting Group won't help you. I remember how I sold the Three Little Pigs dumpling factory to

Planet Management. We pulled off a major deal at the time, literally on a restaurant napkin.

Of course, it's advisable to involve large consulting and analytical companies. It all depends on your starting capital. If you're starting from scratch, a so-called pure startup, and you're a student, you won't have this opportunity.

But if you've earned some seed capital—say, half a million dollars, you're 28 to 35 years old, and you're starting something serious—if I were you, I'd spend 10 to 15 percent of that money on analytical tools and model development. It won't necessarily make a dramatic difference.

Your consciousness will tell you where to go or not, but at least you'll get another outside perspective. Consulting with your friends at the bar is also a unique way

Get a third-party opinion, but it won't be objective. Your friend or acquaintance isn't interested in giving you the right advice. Not because they want to harm you or wish you ill, no, you misunderstood. People simply don't have time to think: to express a smart idea, you need to think about it.

I often get questions or requests to evaluate business ideas on Twitter (twitter dot com U.R.L) or LiveJournal (olegtinkov dot livejournal dot com). Frankly, this is very difficult for me to do; I simply don't have the time or the motivation. I can offer advice, but it will be very superficial and possibly unqualified. However, with my background, I'll often give the right advice.

But professional analysts will prepare a report for you for a relatively small fee (10–15–20 thousand dollars), and they are interested in doing it, because you are paying for it.

Such consultations will be quite qualified. But again, if they criticize your idea to smithereens and say it's impossible to go there, that doesn't mean you should abandon the idea. It's simply another qualified look at your problem from a different perspective. I wouldn't take any advice or consultation as definitive.

recommendation, rather as another opinion worthy of attention. And perhaps, based on Based on this opinion, you need to change your idea, adjust your business plan, and reconsider some parameters, etcetera

There is no such thing as too much analysis.

It's also a good idea to talk to people in the industry. But again, what are their motives for meeting and talking to you? You can resort to trickery and invite them to dinner, to a bar, or offer them something. I've been lured to a restaurant this way more than once, and it didn't immediately dawn on me that they were there to test out a business idea and get my advice. Well done! They succeeded, and I hope you can too.

Market capacity is a very important factor. Why did I leave the dumpling business? Having sold the business 10 years ago, I don't regret it at all and believe I made the right decision.

Unfortunately, the market Absolutely small. At the time of the sale, it was probably valued at 30 million dollars annually for the entire country. Now, it's maybe 50 million dollars—meaning it hasn't grown much in 10 years. You need to look at the nominal market size, in general terms: what are the sales volumes of this particular product on the market? Whether in rubles, dollars, euros, or shekels—it doesn't matter.

On the other hand, in the case of a startup, when a unique, innovative product is created

If you're talking about a product that has no analogues on the market, this criterion is certainly not important. Who cares about market share if the market essentially doesn't exist? The number of players in the market, the number of those losing money in the market—that's a secondary factor. They're losing, but you might be making money. I've had plenty of examples like that in my life.

You just have to go and do it.

If someone is losing money in a particular market or has just gone broke, it's not This means that there is no need to deal with the market.

For example, I believe that development in Russia is dead. Companies are de facto bankrupt. But does this mean that one should not enter this business? Not at all. Those suffering losses, People going bankrupt aren't a deterrent. I think now is a great time to enter the construction and development market. Prices have fallen, building materials are cheaper, land is significantly cheaper —there's a huge opportunity for this market. If someone enters at this stage with the right, professional approach, rather than building like they did before, using kickbacks, Moscow-style, they'll be a serious developer.

The real estate industry is huge. Surely among you, the readers of this book, and your I don't know anyone who wouldn't want to improve their living conditions - buy apartment, increase living space by one room, buy a country house. Volumes

The market situation speaks for itself: you are all potential customers. The market is huge, teeming with potential—therefore, the time to enter is absolutely right. I won't cite numerous examples of entrepreneurs doing stupid things.

For example, they open bars in complexes with restricted entry, security services, and essentially cater only to residents. You might as well open a bar on a desert island. This probably speaks to the entrepreneur's creativity, but it doesn't speak to their intelligence.

You're probably reading and thinking: he tells it all well, but he doesn't say where take the money. There's never enough money. It may seem strange to you, but right now, at 43, having bought and sold several businesses for tens of millions of dollars, making my fifth business, I can say with confidence: I don't have enough money today, I'm looking for it. In the fall

In 2010, I spent 80 percent of my time looking for money. This paid off: my

The bank successfully placed ruble bonds worth 6 billion rubles and Eurobonds worth 175 million dollars.

The key competency of an entrepreneur, besides the courage to take risks, is

The ability to raise money. Not just for the start-up, but also for development. Read more about this in Chapter 16.

Building a business entirely on borrowed funds—such miracles probably do happen, but this is more likely to be the case in the innovation sector, in startups. As a rule, you have to invest your savings, sometimes your last, and save. But then, you can use your own money to attract debt. As a rule, with a startup, you can use a ruble of your own money attract 50 kopecks of debt - the ratio is 2:1. Otherwise, you must find partner and share the company's ownership with him right from the start. In my opinion,

This model is less stable. After all, if the business goes well, you'll be sorry to share it with your partner, and conflict will arise. And if it goes badly, your partner will blame you for everything, and things will get even worse. So, starting a joint business together is perhaps even more difficult.

heavy option.

As for business angels and all that stuff, it's complete bullshit. Don't believe it. And don't write about it. Don't ask me for money on Twitter anymore. I don't believe it. Firstly, this institution practically doesn't exist in Russia. And I'm writing a book for Russians. Secondly, in our time of instability, when the planning horizons of even the big businessmen we see on T.V are around three years—what can we say about us, the medium and small entrepreneurs of Russia? We can't be business angels for a number of reasons. No one will come and offer you money to implement your idea. And if they do, they'll ask for a lot. No one will give 3 million for 30 percent of the shares. More likely, 70 percent.

You will be given 30 thousand shares - this is, unfortunately, the reality of Russian business today. Money is a problem.

I would advise, as I did in my youth, borrowing from relatives. It's a good option. In Soviet times, interest didn't exist, so I borrowed for free, both from my wife's parents and my brother. But I'm essentially paying interest now; nothing in this life is free. But that's a philosophical question, beyond the scope of this book.

My philosophical book, "I'm Like Everyone Else," was published in 2010, and you can read some thoughts on this subject there. In the new book, I'd like to focus purely on the economic aspects of human activity.

Money is important, but finding it is difficult.

Look for them, find ways to get them. Do whatever you can, get them from anywhere—all methods are good. Except stealing. Stealing is not necessary, and I would only welcome all other methods of attracting money.

Choose an innovative product or try to improve an existing one

An existing one? If you're smart enough, if you're well-educated, if you truly see a neesh and believe in your product, if you've calculated everything—of course, a new product is much better. You'll make a lot more money, you'll get your million faster if you create a new product. But creating a new product is something only brilliant, talented people can do. Average people like me can't. My whole life I've been taking existing products and improving them. modifving them. if you will— copied. Both models are good. There are brilliant, great people, like Sergey Brin, who come up with a new product—that's why they're all billionaires. For me, it's enough to improve the product. So, choose: if you want to make billions—

Come up with something; if there are millions, improve it.

Is it necessary to do a business project? I think it never hurts. Analysis of the idea should It can be written on a napkin in a restaurant—I've already talked about this—but a business plan needs to be written; it will help structure your thoughts. All five of my businesses had one: an A.4 document of 8 to 15 pages. There are tons of forms and guides on the Internet on how to write a business plan—you can take these ideas, research them, and they quite solid.

You should also have a clear understanding of the 4.P's of marketing: product, price, place, and promotion. This concept is attributed to various people—Jerome McCarthy, Theodore Levitt, Philip Kotler—but it's not so important who came up with this formula, but it's essentially brilliant—simple and easy to remember.

Product

What are you selling? The product or service must be needed by people—not everyone, of course, but the target audience. The product must be better, or at least no worse, than the competition.

Better is preferable—after all, you want to win over consumers who use familiar brands. The product must be right and of high quality, because without a product, there's no business.

You must clearly understand how your product is better for the consumer. If you don't have any ideas on this, it's better not to start.

Price

How much does it cost? The price of a product or service should be reasonable. If your product is better than your competitor's, the price—and profitability—may be higher. If there's no advantage, then a lower price might be the right entry strategy. However, don't overdo it. First, a business needs to make money, not just break even. Secondly, consumers may subsequently refuse to buy a product that has proven itself inexpensive at a higher price.

The "Price" section also includes the company's discount and markup policy. For example, regular customers are often given discounts or sales are held from time to time. Don't underprice—you'll ruin the market for yourself and others.

Place

Where do you sell? More broadly, this can be understood not as the point of sale, but as a distribution model. In the case of real estate or restaurants, the importance of location is obvious. It's not for nothing that they talk about the three main factors in determining the price per square meter or the success of a restaurant: location, location, and location.

It sounds like a joke, but it's true: a high-traffic location will guarantee success even for a restaurant with less-than-delicious food. But I'd like to point out that "not very tasty" doesn't mean "not delicious."

Think immediately about how to sell your product. Directly or through partners? Online or offline? Through brick-and-mortar stores or through agents?

What discount should you offer partners? How can you motivate them to increase sales?

The distribution model should maximize business profits, not revenue.

Promotion

There's a product, a price, and a sales plan. But it won't work until demand for it is created. First, you need to familiarize the consumer with the product, then convince them to buy it, and—the ultimate goal—turn them into a loyal customer.

This requires advertising and PR. These tools help attract attention to the product, but it's important not to mislead customers' expectations. If advertising says one thing but reality turns out to be another, the customer likely won't become a regular. You need to allocate sufficient funds for advertising, and PR can't be bought—you either have it or you don't.

All this activity ultimately shapes your brand—what consumers think of your product. If your brand is strong and positive, you can sell it for more than a similar product with a weaker brand. Because when people consume a product, they want to experience certain emotions.

If your product or service evokes emotion, you're on the right track.

So, the product must be holistic. Each of the 4.P's is critical and important. Like a brick in a wall: if you remove one, the whole thing falls apart. All four are essential.

All 4.P's are interdependent: price depends on product quality, brand, and distribution model. A brand depends not only on advertising, but also on impressions.

The buyer's experience with the product and its location determines its impact. Price greatly influences a brand: a cheap product will never become prestigious and desirable.

Distribution depends on price and brand characteristics. If your product is elite, it can't be sold in mass-market locations—this will hurt prices, and therefore, brand. It's no wonder that boutiques are located on the most prestigious streets, and counterfeits are sold at clothing markets. And expensive brands, trying to appeal to everyone, quickly lose the most discerning customers. Likewise, attempts to sell a mass-produced, cheap product at a high price are doomed to failure: Klinskoye beer can't cost the same as Tuborg or Heineken.

I wrote a business plan for Tinkoff Credit Systems Bank in August 2006. And when I reread it a month ago, in parts I simply laughed at myself, at my naivety and stupidity. And in others, I realized how smart I was and how I had foreseen many things. In any case, writing a business plan is essential.

Now, regarding the projected profitability, or so-called margin. I talk about this often, and I'm often criticized, but I'm certain that a new business, created completely from scratch, should have a very high profitability. There's absolutely no need to be shy about this. I once talked about 200 to 300 percent. But it could be a thousand.

percent, and 20,000 percent if it's an innovative business or a business in a completely new field. What's Google's profitability percentage? I don't know, tens of thousands of percent. If you want to become a successful entrepreneur and make a million, the funniest thing you can do is find an existing product, like a fridge magnet, and try to improve it, change it, and sell it at 40 percent more.

But that's a completely stupid story; it won't get you anywhere. You have to come up with a completely new product or improve what's already there, and present it in such a way that you can charge 2, 3, 4 times more than the price of a similar product. Such a large markup will allow you to avoid going broke. You all remember that 90 percent of newly created

Businesses go bankrupt. To build a stable business, to avoid bankruptcy, to avoid falling into the top 90 percent, but into the top 10 percent, you need money. Money comes from big profits. But at first, your sales volume will be very small.

You need to survive the first year, two, three, and for that, you need a good profit. Gradually, as your market share grows and your sales increase, your margins will shrink, adapting to market conditions. The market itself will force you to reduce your markup.

But you need to start with big markups—this is not just my personal experience, but the experience of entrepreneurship worldwide. No business or startup can survive with sales at 10 percent. That's a road to nowhere, to ruin.

Are you reading this book to make a million? So here's my first piece of advice: don't be shy about markups, don't be shy about asking for a high price. If your product isn't selling at a high price, no one will buy it at a low price either. It seems counterintuitive, but it makes sense.

Where can I get market information? You guys are lucky, you live in the digital age, with the internet! We couldn't even dream of this when we started our business 20 years ago.

Two clicks, and you already know more about the market than I could have gleaned in two months at the library. Or by standing all day at the Warsaw market, watching the vendors sell. A huge amount of analytics and fairly high-quality information can be found online for free.

There are many websites that provide access to databases, analytical portals, reports, and research for a reasonable price. In this sense, you're lucky.

How to compete with non-market players operating at a loss, which are obviously

Planned costs and ruining the market for others? I think the market itself will punish them.

These could be huge companies, which means you're already in the wrong business.

They've set their sights on it, or they're suicidal idiots: in a month or two, they'll be gone, they'll lose all their money and leave the market.

If you have three or four ideas, you need to choose one. I would strongly advise against starting a new business in several directions at once. You need to Concentrate. How to choose? Sorry, it's just intuition. Here's my second piece of advice: Use your intuition, don't listen to anyone.

Every person has an asshole, and everyone has an opinion. Listen to yours.

Listen to your inner voice and intuitively choose one business idea. Discuss it with everyone you can: friends and foes, your wife, your girlfriend, your mistress—but don't take everything at face value.

Try to analyze and think for yourself. A true entrepreneur has the right and should make his own decisions. Choose a business that is easily capitalized and sellable.

Don't start businesses that can't be sold.

Don't listen to the idiots who tell you that Tinkov is crazy and is building businesses for sale only.

If an entrepreneur doesn't build a business for sale, but rather for themselves, for their family, for the future, they're no longer entrepreneurs; they're good artisans. In Italy, for example, there are well-known, respected artisan families. But today, experience shows that they've been corporatized, one way or another, and no longer belong to their families. The true model of capitalism is: everything should be bought and sold.

Talk to envious people, potential competitors - and choose a good one,

The right, liquid, and successful business for you. You and only you choose the idea.

The idea has been chosen—excellent. Let's begin the project and simultaneously develop the brand under which your company will operate. Read about branding, a crucial part of business, in the next two chapters.

Chapter 3 How to Name Your Business

Captain Vrungel's famous cartoon line, "As you name your yacht, so it will sail," has become a real-life superstition among businessmen. How do I feel about this? Objectively speaking, the name is, of course, secondary. But it can be so awkward to hear or so unreadable that it will hinder your business and reduce sales, even if your product has excellent consumer properties and your service is high-quality.

For example, I like a certain brand of glasses. The glasses are beautiful, with thin temples. But the brand name is written in such hieroglyphs that it's impossible to read, so I can't give it to you here. And I can't recommend them to my friends—Same.

Name your company the way you want the brand or trademark to sound in the market. Nowadays, this is done more often than ten years ago, but not everyone does it. In my opinion, It's strange and wrong for a company's name to differ from its main brand. When I was producing pelmeni under my own brand, my company was called Nika LLC, and the pelmeni were called Daria. I thought, why is there all this confusion in people's minds?

So I suggested to my colleagues that we unify the names and rename ourselves Daria LLC. It became much more convenient and understandable for everyone. So your brand name should match company name.

When "inventing" a brand, use your imagination; don't try to copy someone else, be original! Check right away (Yandex will help) to see which other companies use the same or similar names. You're unlikely to be happy if you're planning to name a cafe after ten other establishments in town. The name must be unique.

Consult with family, friends, and acquaintances. Test your ideas on other people. name. We all make mistakes, and the name you like so much today may be It's of little use as a brand. You'll realize this later, hopefully not in the midst of the project.

At the same time, think about how the domain name will sound. Ideally, the title and the domain name should be the same, but short, catchy domains tend to be narrower.

busy. You have room for creativity here, but remember that the main domain name should somehow communicate the brand.

Prioritize legal matters. Your brand must be protected, and you need to ensure this before starting your business. Once you've chosen a name, you must register it with Rospatent (the full name is

Federal Institute of Industrial Property of the Federal Service for Intellectual Property, Patents and Trademarks, or abbreviated as (FIPS), having paid the state fee. You must do this through a patent attorney—a special category of lawyer.

Rospatent will conduct an examination consisting of a formal part (checking the correctness of the preparation of documents, payment of fees, etcetera) and examination of your application designations (checking a trademark for its identity and similarity with a previously registered trademarks). Upon completion of the registration procedure, you obtain the relevant certificate.

For a product, you register a "trademark," for a service, a "service mark." Words, pictorial, volumetric designations (or their combinations). Restrictions on color. There are no combinations. But don't think that any meaningless gibberish will do.

Before submitting your newly invented trademarks for registration, it's best to play it safe and check Rospatent's databases to see if anyone has already used them. This is called a "cleanliness check." It's very similar to registering a new internet domain: you enter your invented address and check if it's available. Your trademark must be original, unlike any other registered trademark, and comply with applicable laws—then you have a good chance of success.

There are a number of legal restrictions when registering a trademark. For example, your application will be denyed if a similar trademark already exists that is "confusingly similar" to the one you've created. Also unacceptable is the situation where your The designation consists only of elements that are "in general use" or "constitute generally accepted symbols and terms." Elements that represent state

Symbols and signs that are contrary to public interests, principles of humanity, and morality. There are other cases, too. Don't be lazy—check out Part 4, Chapter 76 of the Civil Code of the Russian Federation, "Rights to Means of Individualization of Legal Entities, Goods, Works, and Services." and enterprises." Read on to avoid making a mistake by filing for registration knowingly "failure" option.

When registering a trademark, the International Classification of Goods and Services for the Purposes of the Registration of

Marks), or ICGS for short. It's important to register your trademark correctly in the classes relevant to your business to protect your rights. Some people sell household appliances, others sew clothing, and still others run their own dental clinic—all of these goods and services belong to different classes.

The International Classification of Goods and Services consists of 45 classes: from 1st to 34th class - goods, and classes 35 through 45 - services. For example, musical instruments belong to the 15th class; clothing and footwear - to the 25th; beer and mineral water - to the 32nd class; toys - to the 28th. Services are also all "numbered": advertising, business management - the 35th class; insurance, financial activities - the 36th class; construction and repair - the 37th class; education and support of the educational process - 41st, etcetera

The ICGS codes are similar in principle to the okved (All-Russian Classifier of Economic Activities) codes.

classifier of types of economic activity).

If you wish, you can later sell or lease the rights to your trademark. It is your intellectual property, so it can be subject to appraisal and sale.

Once registered, you, as a limited liability company or sole proprietor, become the owner of the trademark and receive rights to protect your intellectual property in the event of infringement. You have the right to use a special protection symbol next to the trademark. This is the Latin letter "R," either alone or in a circle, or the words "registered."

Trademark." The right to a trademark is valid for ten years from the date of filing an application with the registration authority, and then you can renew it an unlimited number of times.

It is advisable to comprehensively protect the brand not only for one class, but also for similar ones classes. In any civilized country, if you want to register a name Gucci for a yacht or a car, no one will let you do this, because Gucci is A well-known, recognizable brand. And in Russia, it's possible!

So, if you're planning to create a famous brand—and that's exactly what an entrepreneur should strive for—think about protecting it immediately across different product classes. The Civil Code, of course, stipulates liability for illegal use of a brand. If your trademark or a confusingly similar designation is illegally placed on a product, its packaging, or its label, the product is considered counterfeit. You have the right to demand its removal from circulation and destruction at the infringer's expense.

You can also claim damages or compensation from the infringer. But in reality, holding the offender accountable can be difficult. Moreover, trademark protection— a complex process that requires a lot of your time and effort.

Be prepared for the fact that sooner or later you may encounter an unscrupulous competition or cases of infringement of your trademark rights.

I hope this doesn't happen to you. But just in case, remember - there is legal mechanisms for combating lawbreakers. On the other hand, if people start copying you and want to be like you, then this is an indicator that you're on the right track, and your brand provides real added value, has metaphysics, which you can read about in the next chapter.

Chapter 4 The Metaphysics of Branding

Whatever anyone says, there's some metaphysics to a business name. This is especially true if the brand bears the owner's last name or the names of relatives—wife or children. In this case, the level of responsibility to the consumer increases exponentially: the entrepreneur is responsible for the quality of their product or service with their reputation. But at the same time, pride and self-awareness also increase.

One day, one of my blog readers asked: "What is the secret of your success?"

"The pelmeni brand 'Daria' is essentially a rather banal name, and why aren't other brand names as successful?" I'll answer. Firstly, because it's not a banal name. 'Daria' is my daughter's name, and it embodies the parental love of mine and my wife Rina. Dasha was our only child when we founded the business. The warmth of our relationship with our daughter translated into a corresponding attitude toward the product. I think the consumer unconsciously sensed a special metaphysics.

brand and voted with the ruble.

Secondly, I disagree that there aren't other successful brands. For example, in St. Petersburg, ice cream brands like "Dasha" and "Mitya," produced by the Petrokholod factory, once sold very well. Nikola kvass is a good brand. True, it's a bit of a rip-off of Pelevin's "Generation P." Afanasy beer, Alyonka chocolate, the Katyusha cycling team—believe me, Daria isn't the only one, and don't give me undeserved credit.

If I were an entrepreneur, I'd use my name on a purely consumer brand. And that's when a person is truly involved in the business—they're the C.E.O, the C.O.O, and everything else.

There are people, like Oleg Anisimov, who believe that there are good and bad last names for a brand. For example, Tinkov, in his opinion, is a good last name. And other people have often said to me, "Your last name is a beer name!" That's nonsense! To name a beer "Anisimov" is much cooler because Anisimov is an old Russian surname. And with $20 million invested in advertising at 2003 to 2005 prices, it would have been a super beer name. And Tinkov is an ordinary Russian surname, with some strange...

morphological roots. We simply unraveled it, nothing more and nothing less.

Don't believe that there are suitable and unsuitable surnames. Any surname is worthy of being your brand. And with some investment in advertising, it can secure a worthy place in the consumer consciousness.

Of course, if your name is Evgeny Katsenelson, it would be comical to sell, for example, Russian bubliks under that brand. But generally speaking, there are no problems.

By the way, Anisimov believes that cell phone stores under the Chichvarkin brand would have been a bad decision. I completely disagree with it. If Evgeniy Chichvarkin replaced Euroset with Chichvarkin; in two or three years, the success would have been even more impressive. What Euroset is is unclear. So what about European Set? It means nothing to me. But Chichvarkin has a mystery, a challenge, some kind of complex morphology—chich, varkin, something called "varit," "shkvarki," and so on. Besides, The name suits the man perfectly. Zhenya is definitely a Chichvarkin! Honestly, I'd rather buy a phone at a Chichvarkin store than at Euroset. Evgeny, by the way, is now in He's opening his own business in London. If I were him, I'd just call him "Chichvarkin." That would attract the attention of the British, let alone the Russians.

A brand name is a great move.

The connection between the brand and my family name came about, essentially, by accident. When I was buying I came up with the brand "Nashe Pivo" (Our Beer), a reference to "Nashe Vodka" (Our Vodka). In English, it's called "Our Beer." The equipment arrived from Germany, and the packaging said "Tinkov." I asked the supplier:

- — Why is my last name indicated?

- Well, how is it? The beer is yours, right?

— Moyo.

— That's why it's called Tinkov. What does Nashe Pivo have to do with it?

I feel kind of scared, 1997, gangster Petersburg. Why show up? Everyone will be looking at me. I knew. On the other hand, I wanted to distinguish myself, to show that I was responsible for my work. So I decided, at my own risk, to keep my last name. It was only out of apprehension that I finally added two "f"s at the end—and that's how the Tinkoff brand was born. It wasn't an easy decision, but it turned out to be a breakthrough. Now this approach seems obvious, but back then, St. Petersburg was simply terrifying—the Tambov and Kazan gangs, the showdowns.

T.V series partially convey the intensity of the situation back then. It was customary to keep a low profile.

And then the private brewery Tinkoff appears, brewing very tasty beer,

Made entirely from German ingredients, this was something completely new for St. Petersburg.

And after the "Tinkoff – One of a Kind" ad, co-created with Oleg Kompasov, the brand became known in Russia.

Generally speaking, branding oneself is a commonplace thing worldwide, even in pre-revolutionary Russia. Landowners in Moscow, Tobolsk, and Tyumen would call their businesses by their own names. This was considered a kind of quality mark. Then, unfortunately, everything... ended with the arrival of Soviet power.

I was probably one of the first to put my name in the name of a business in Russia. After the collapse of the Soviet Union, a third business operates under the Tinkoff brand: First restaurants, then breweries, and now Tinkoff Credit Systems Bank. I don't regret it at all. No need to be shy! If you think your product is great, feel free to put your name on it.

But, unfortunately, in Russia, everyone loves to copy. I beg you—please don't! We need our own ideas, innovations. When I created the Tinkoff brand, other brands with "ff" immediately started appearing—Chaynikoff, Penkoff, the Peshkoff restaurant on Tverskaya Street in Moscow, and others.

Such stupidity! I explained why I added "ff," but why did others start doing the same? Apparently, they wanted to butter up, to ride on my tail—as our marketer Samuel Avetisyan used to say. It's cheap and uncreative.

I'm especially irritated when, in addition to using a double "f," the company's line of business is also played up. Say, if it sells flour, they call it "Mukoff." If it treats teeth, they call it "Zuboff." This, gentlemen, is completely outrageous, and speaks volumes about the owner's lack of creativity, his lack of seriousness, and his low level of

I.Q. Name brands, especially if your last name isn't yours, are stupid, for example.

"Kolbasoff." How can you call a beer restaurant that when there's already a "Tinkoff"? It's not comme il faut, to say the least.

Try to be original, don't imitate, but create, be creative! Trust your intuition, do what you feel, without looking back, don't listen to anyone—not your wife, not your husband, not your mom, not your dad. Just please don't put "ff" at the end! There are no bandits now, and you have no one to hide from.

The pioneer in using the surname as a brand was, of course, Vladimir Dovgan. He is the first brand builder in Russia, smart, talented, unique entrepreneur. If he had focused on vodka, he would be mega-rich today. Vodka "Dovgan" would have surpassed "Beluga," "Russian Standard," and "Imperia." What a breakthrough for Russia: a real person's photo on a bottle!

A serious argument for the buyer is that the manufacturer is responsible for the product's quality. The prospects were bright, but not everything worked out. While I change my field of work once every four or five years, and significantly, Dovgan does it every two years. He's unfocused.

It was Vladimir Dovgan who, back in the mid-1990s, was the first in Russia to start selling his brand. But he did it, in my opinion, too quickly, handing it out left and right, without monitoring the process or the quality of the product. And that's very important.

Take the Virgin Group, founded by British businessman and friend of mine Richard Branson. He does the same thing—franchising the brand. He often has absolutely or almost nothing to do with many Virgin stories. And with some— like Virgin Atlantic Airlines or Virgin Galactic—it's directly related. So Richard will measure ten times. Essentially, his entire team is dedicated to studying companies, negotiating, and concluding licensing agreements with them for heavy conditions for them.

Virgin and Dovgan are examples of successful umbrella brands. In Russia, I can't think of any other examples other than Dovgan, which was in the right place at the right time.

Virgin, on the other hand, boasts a stunning range of industries: airlines, rail transport, video game production, and mobile communications—to name just a few. Read more about Virgin and other great brands in Chapter 20.

The "umbrella" approach is also found among fashion industry companies—Dolce & Gabbana, Gucci, Hugo Boss, and others. They "stretch" their brand: they can produce under one label clothing, perfumes, leather goods, jewelry. But, for example, a mur-say-dees Benz bicycle is more of a promotion of the core business than a new business.

line.

As aspiring entrepreneurs, don't worry about creating an umbrella brand. It only works in exceptional cases, like Virgin. And if it doesn't work elsewhere, why should it catch on here? It's better to create a strong brand focused on a single topic than to spread yourself too thin trying to combine them. Don't chase two birds with one stone. If the brand and business are successful, they can be replicated through franchising.

I thought about this with Tinkoff and even at the end of my previous book, "I'm Like Everyone Else." I encouraged people to call with proposals. But when the calls and letters started coming in, I realized that I couldn't ready.

The problem is this: People are willing to use someone else's brand when they can't afford to pay for the promotion of a new one. As soon as this opportunity arises, they immediately forget how they got their start and are unwilling to fulfill their obligations. Because our country still has a weak entrepreneurial culture, and intellectual property protection is in its infancy.

In the West there are laws, contracts, trademark protection, and finally, Entrepreneurial culture and ethics. And the Protestant psychology is such that no one will even try to cheat.

If I allow someone to use the Tinkoff brand to produce condoms, the following will happen: The condoms will become successful, and retailers will eagerly buy them, and a smart businessman will immediately start supplying them with a similar product, but under his own brand.

It's hard to condemn such behavior. Because there's no competition! In the West. hypercompetition, you need to survive. You take, say, the Ferrari brand and start Producing shirts or t-shirts—it's clear that you immediately stand out and sell. And you're willing to give up half the profits for it. Otherwise, you wouldn't have those sales.

And you won't if you stop making branded goods. Because the market is ultra-competitive: without investing in your brand, bringing your product to market is simply unrealistic.

I love how creative Western entrepreneurs are with their brands. They're great at using different languages. Americans like to name cafes, bars, and coffee shops in the Italian style, and restaurants in the French style.

I'm drawn to brands with catchy names, with a special meaning, so to speak, "on topic." In Italy, there's a famous clothing brand called Principi Di Firenze—it translates as "Prince of Florence," but to us it sounds like "Principles of Florence." It's a good name. I even had the idea of naming my next business "Principles."

Leninsk-Kuznetsky." Can you imagine: Leninsk-Kuznetsky Principles LLC? I think it's pretty cool. It attracts attention and makes people wonder: what's behind this?

There aren't many well-known brands in Russia. You know them: Kaspersky, Perekrestok, Yandex, M.T.S, Beeline, Megafon. vaz - no matter how you look at it, with a large number Negativity is also a brand. And it's a much stronger brand than its current managers realize.

Since I now work in the banking business, I am more comfortable talking about this topic. Among banking brands, I consider Trust, for example, a successful one. Although I don't really understand it, the bank owner's strategy in terms of key, basic banking products.

But, I guess I shouldn't understand it. But I really like the title, it's beautiful. Graphics, an English word. However, if someone doesn't know English, how will it be perceived in Russian? "Sberbank" is a beautiful brand, short for "savings bank." "Alfa-Bank" is also good, the jewel in the crown of the Alfa Group.

"Russian Standard." The only thing that bothers me here is the shared name with vodka. I'm currently observing a shift in strategy for both the vodka and the bank. But today, in the minds of consumers, "Russian Standard" is a vodka "for the rich." It costs several times more than Regular vodka of all sorts. And Russian Standard Bank, in the eyes of most, is "for the poor." There's a certain dissonance. But at the same time, the brand itself is cool, with all its contradictions.

But I absolutely dislike the hodgepodge of companies like Promsvyazgazorazvyazka and Prominvesttekhraschet. And what is Nomos? I don't know. And if I don't know, then neither does its key customer. It's a poorly named company, in my opinion. But I do take my hat off to the owners of Nomosbank for their successful I.P.O—they closed the deal in the spring of 2011 for $782 million. So you don't always need a great brand to do good business.

To summarize this chapter, a brand is your capital, an intangible asset. Often, it more than the value of the company's tangible assets, such as buildings and equipment. The Apple brand, for example, is valued at $150 billion. This is because hundreds of millions of people around the world are devoted to the logo with the bitten apple, seeing in it revolutionary spirit, technological sophistication, and independence.

When starting a business, choose your brand carefully, check its integrity, and analyze how it will perform against competing brands.

There is no ready-made solution. We must think, think, and think again. We must try to understand the psychology of your target audience: why people would be more likely to buy a product under the name A rather than B.

You finally need to put love into your business. The consumer will feel it. Oh, and don't add two "f"s at the end.

Chapter 5

Start a business

The idea has been chosen. Where to begin? Previously, people started with buying a computer and a fax machine! You bought a fax machine, set up the computer on your desk, and voila, you have a business. Now you can get by without a desk and a fax machine, but you still won't get very far without a laptop and a mobile phone.

Next comes registration, a very exciting moment. In one of the "Business Secrets" programs, Oleg Anisimov very convincingly explained how to register as a sole proprietor under the simplified tax system and obtain the coveted certificate with a seal. Please go to tinkov dot com U.R.L and watch the program. I interviewed Oleg Anisimov myself, although usually we both ask the guest questions.

You can register a full-fledged company instead of becoming an individual entrepreneur. I believe that an LLC (Limited Liability Company) is the most correct form today registration. Again, an LLC can operate under a simplified tax system, meaning you'll pay 6 percent of your income or 15 percent of "income minus expenses"—the choice of tax scheme is yours, but I can say that you won't find such options in developed countries.

Attractive taxes. Russia is often criticized, but for small businesses, taxes are very, very attractive, especially if they don't rely heavily on hired labor. It's a different story for larger businesses—they have a higher profit tax of 20 percent, a high V.A.T rate of 18 percent, and social taxes that employers must pay for each employee. In 2011, social taxes were raised to 34 percent of the wage bill.

By the spring, it became clear they had overstepped their mark: businesses were once again retreating into the shadow economy or going bankrupt. Therefore, starting in 2012, the government should reduce social taxes to an appropriate level.

In a small business, this issue is not so important - after all, you may not have to hire

Employees from the market can be removed, and they can work for themselves and their immediate family members, which will allow them to avoid paying salaries. It's more profitable to pay dividends, taxed at 9 percent per annum, at these rates.

This is where we end our conversation about the problems of large businesses; you still have to grow up to that level, and in this book we are looking at the creation of small businesses.

If you have a company, a seal—wow, you're a businessman, an entrepreneur! That's a really cool feeling! I recommend taking your girlfriend or wife and best friend to a restaurant that same evening and drinking a bottle of your finest red wine. That would be a great start to a project. Or go to church and hold a prayer service for the beginning of any undertaking.

As an Orthodox Christian, that's exactly what I usually do, and I'm not forcing it on you. Lord, have mercy! After all, who are we without the help of our Lord? Bugs.

What work should an entrepreneur do themselves, and what should they delegate? At the initial stage, an entrepreneur should do everything themselves. If they start delegating things in the first month or the first week, they are not really an entrepreneur. There are two reasons for this.

First, there is no money, or very little. There is no time for outsourcing!

make the most of your money. Secondly, in my opinion, technology works best when the businessman goes through all the stages of the journey himself, understands thoroughly understand what's going on. Even unloading a truck with goods is useful, because then you'll understand how the loader's job works. And then, when paying for such You'll take into account the work, where the loader might cheat or deceive you. I believe it's crucial in the first weeks and months for the entrepreneur to personally handle as much of the work as possible. Even if it's not entirely familiar, understandable, or beloved. This will provide a certain wealth of knowledge that will help in the future.

At the start, you need to think first about the business. About how to make money. All thoughts should Concentrate on the first ruble.

You should go to bed and wake up with the thought: When will that coveted first ruble arrive in my account? Believe me, it will also An emotional, exciting moment. I won't try to convince you to drink red wine here, but it's necessary to celebrate somehow.

In general, I think that we need to celebrate holidays and small successes. Before something important at the Tinkoff Credit Systems Bank event—the issuance of the millionth card—I gave a gift to the bank's top managers, and we flew to the most expensive island in the world—Necker, vacationed there with Richard Branson. So, in the employees' minds, the completion of a certain stage, a distance traveled, a waypoint is recorded. Since the "Daria" days, I've tried to reward employees with interesting trips, and we've been to just about anywhere: Jamaica, Sicily, Hawaii, Verbier, Necker.

I like to draw an analogy with my favorite sport, cycling.

In the passes of Europe, in the Alps, at the highest points, there's a bar. If you've climbed a steep hill, there's usually a bar at the top. Historically, they've been there. Horses used to be parked there, now it's cars, motorcycles, and bicycles.

Once at the top, everyone stops for a Coke and then rides back down. This marks a certain point.

Don't hesitate to celebrate any events - the first client, the first ruble, the first million clients, the first ten million clients. It's important to record this in your The stages of success in the brain. This is metaphysics. Then success is translated into further growth and development of the organization.

If you are not successful, your business is not successful either. If you do not think positively, you do not have so-called positive thinking, then nothing will work.

You need to be fully concentrated and not scattered.

It takes total dedication. I'll give you an example of an athlete. A professional athlete.

and an entrepreneur are basically the same thing, the methods and approaches are similar. When a professional athlete is preparing for an important start, the World Championship.

At the Olympics, his selflessness was brought to the absolute. I know many

Athletes don't have sex for four months. They live in the mountains during training camps;

think only about the Olympic medal. If you are not focused and scattered,

If you get distracted by trivial, insignificant things, you'll never succeed. Therefore, in a startup—I emphasize—in the most difficult first weeks, forget about your wife.

Family, friends, mom and dad. Dedicate yourself to the project, live it day and night. Once the project is off the ground and the first ruble is earned, you can relax and return to normal life. An entrepreneur is, first and foremost, a human being, a member of society. There's no need to go crazy, be like Uncle Scrooge, sitting in a closet and counting money.

What mistakes should you avoid at the start of a project? The key mistake at the initial stage (and no one has avoided it, including me) is hiring the wrong people. My business experience is full of such cases. You see the business in your own way, but life makes adjustments and usually brings disappointment. And only occasionally – charm.

However, it is extremely important to hire people at the very beginning: they will be the ones who will lead the business and to pull it, to build it, to help you. So try to find the right ones right away workers.

How can you avoid mistakes? Don't even try, you're bound to make a mistake. Humans are very strange, unique creatures. As the Discovery Channel says, they're the most dangerous animal in the world.

In the top 100 most dangerous animals in the world, humans rank first. Their motives aren't always clear; they're contradictory.

Just think about it: the most powerful supercomputer ever invented, generating 1,000 watts of heat and consuming a ton of electricity, is by all measures incomparable to even 10 percent of the human brain! We still think and analyze faster. We breathe, smell, intrigue, and so on. A human being—

It's a complex substance. Therefore, it's impossible not to make mistakes. This isn't geometry or algebra.

Of course, disappointments await you, and mistakes are inevitable. Choose the right person, and your business will be more successful. Try to see the best in people, so to speak, and separate the wheat from the chaff. You'll encounter, especially at the beginning, ass-kissing careerists who will try to adapt to you. Stay away from them.

further away. You need professionals, workaholics. There will be another category of people - Smart managers who bring significant profits to the project and generate a significant cash flow will try to interfere with the business, offering, and often even imposing, themselves as a partner. They will resort to intrigue, sabotage, and sometimes even blackmail. You need to be prepared for this.

Such a person should either be taken on as a partner or kicked out. Probably, in 80 percent of cases, they should be kicked out. And in the other 20 percent, they should be taken on as a partner, not only by providing a fixed compensation but also by involving them in profit sharing. If they continue to squeeze out more and more from the business, we'll have to part ways.

You are lucky people, living in the online age. When I was just starting out as an entrepreneur, such opportunities didn't exist. Now you can do great things by outsourcing and freelancing, especially at the start-up stage, because you save a ton of money. You don't even need to rent an office. Your laptop is your office, and you're always in it, whether on the beach or in the mountains. A business that doesn't generate the proverbial fat can't afford big expenses.

The use of online freelancers and new technologies is very important.

Remember, it is rare for a business that starts poorly to become successful.

Mistakes made at the initial stage are too costly. It's better to think through all the details from the start to avoid excruciating pain later, and to focus on fully developing your business rather than correcting flaws.

Chapter 6 Business development

The startup phase, your initial enthusiasm, is over. You've returned to your family, to the world. Perhaps two weeks or three months have passed; perhaps two years. It depends on the size of the business. In my case, with Tinkoff Credit Systems Bank, it's been two years.

Interest in the project shouldn't wane. How should it be maintained? Obviously, the greater the profit, the more interesting the project. Nothing motivates people like money. Every day, when you open your computer and check your online banking account, you see ever-increasing amounts—that can't help but motivate you.

Of course, if a business brings nothing but losses and disappointments, I'm not afraid to say it – It's a pain in the ass, it's hard to maintain interest. No matter how many beautiful phrases and formulations I create, I'll say one thing: if a business doesn't make money after startup period (from two weeks to two years, depending on the size), interest in it It's difficult to maintain. It's difficult to continue to fight for the quality of the product and improve it.

distribution, promote the brand. But it is necessary.

It's important to keep an eye on expenses. The startup phase and the mature business phase are two different stories. The first phase is a period of rapid investment: you can't help but invest. Later, when the business transitions from a curve to a straight line, it's important measure your future investments against the return, that is look at the efficiency invested funds. The first period is more investment-intensive, while the second is more developed and understandable. During the second stage, it's important not to overlook rising costs.

Let me draw an analogy with airplanes. The plane takes off—the engines are working at full speed.

Power. It flies, cutting through the clouds, struggling. It then gradually reduces the throttle, and when it reaches an altitude of 10,000 meters, the thinner air, free of clouds, the air is easier to cut through, and the engines are running at 50 percent capacity. Kerosene is used half as much; the airliner is at cruising speed. A similar process occurs in business.

If we take the average startup period—a year—by the end of that period, the business has already reached some momentum and should be "at cruising altitude." Here, you need to monitor your expenses and not burn too much fuel. I get a lot of questions about this: when should a business become profitable? Frankly, in Russia, everyone wants to make money tomorrow; that's just moronic.

The global practice is this: in America it's two to three years, in Europe it's five years that a business loses Money. If it starts making money in the sixth year, that's already good. In Russia, deadlines are tight. We have different timeframes.

But still, if a business loses money in the first year, that's normal. If you've already made money in the first year, that's fantastic! Don't forget to write to me at info@tinkov dot com: maybe I'll become your partner in your next business.

In the second year, you should try to break even. In the third year, start making money. Don't take this as a formula or a postulate. It's not a law, but that's how I see it. Don't be disappointed, those who have been losing money for three years but understand that the business has a future and profitability.

Strategically, this is normal. Here, everything depends on the entrepreneur themselves, on the business, its positioning and understanding. Everyone has their own approach. In this book, I'm trying to express my point of view, my assumptions, and unify everything. Don't try to copy it. But in any case, if your business has made its money back or turned a profit within six months, you're very lucky.

The more investment in a business, the harder it is to get the money back. But in the long run, this will only bring profit. After all, the technology and equipment already exist, less is needed. We hire more people, and our processes are more streamlined. I'll give you an example from Tinkoff Credit Systems, which I can relate to. At the start, we spent $20 million on I.T infrastructure—a huge amount.

For the first couple of years, there was no talk of any profitability. We lost in the first $20 million one year, $40 million the second. It's not any different at the startup stage.

All of this is accumulated investment, costs. But in the third and fourth years these

Investments have started to work well and generate profits. Today, you can't survive without investing in an I.T platform. Just 10 years ago, it was enough to buy Microsoft Office. The most advanced ones bought 1.C-Accounting.

Everything else was based on Excel files. Today, without a proper I.T platform, I don't even understand how you can run a business with a turnover of 30 million rubles a month.

Marketing and PR are crucial for business development. I've seen entrepreneurs in my life who didn't take on marketing responsibilities themselves. They delegated them to a partner, a manager, or outsourced them, which is completely strange. And wrong. Marketing and sales are a key competency for an entrepreneur. If you're not good at sales and marketing, nothing will happen.

Everyone's seen the great film "The Social Network" and seen the genius entrepreneur Mark Zuckerberg. Many think he's a mathematician and programmer, but to me, he's just a marketing genius. A smart Jewish P.R-marketing kid. Perhaps Pavel Durov is missing precisely this element. Pavel, in my opinion, is a brilliant mathematician, but from a marketing perspective...

For example, we haven't been able to interview him for a year. He refuses; he's nervous. This

That's wrong. A person who has built a business of this scale can no longer hide.

Of course, he can take a stern public stance, giving interviews, say, once every year or year and a half. On the one hand, such a stance generates interest. But on the other, the media may lose interest in this business, this character altogether. And when he suddenly needs to address the public with some idea or mission, he may be ignored.

Mark Zuckerberg does a good job of proving the importance of marketing. From the very beginning, there were articles in the university newspaper. When he went global, there were more extensive PR campaigns. The main thing is, don't hand it over to anyone else; it's your responsibility. I'm talking to you entrepreneurs now because I realize all the other losers put this book aside after the first chapter.

Now I only talk to normal guys. And girls. Those who want to build a business they can later sell.

Chapter 7

How to prepare a business for sale

When should you think about selling your business? Obviously: during its construction, Creation. Legal documents must be properly drawn up and verified. Find the right firm for this. Let them draft the documents in a way that will facilitate the eventual sale of the business.

If you use the so-called S.P.V (Special Purpose Vehicle) - special

Companies, offshore companies—everything should be structured in a way that facilitates the sale and minimizes the tax consequences. Tax planning must be used within the law. All this is done during the company's construction phase; by the time it's time to sell, it's too late.

Any business, any company, by and large, is for sale. I cited exceptions—Italian family-owned artisan firms. And even those are already being sold.

While I was writing this book, the equally famous Italian company Bvlgari was sold to the French company L.V.M.H.

Of course, companies sell better in markets with large buyers. When you're starting a new business and want to sell it, look for major players operating in the market who will later show interest in your business. It's probably not a good idea to do this in the soft drinks market, where Coca-Cola and PepsiCo reign supreme. Not long ago, when we were vacationing on Necker Island, even Richard Branson complained: "I've fought in every market, survived in all of them, won in some, lost in others, but no one has crushed me like Coca-Cola. Because fighting this de facto global monopoly is practically impossible."

For a business to be of interest to a potential buyer or investor, it must be Properly structured. Have a clear, understandable ownership system, be transparent. So that it's clear who the partners are, and how much they owe. controls. It is desirable to have few partners. The more partners, the worse. business for sale.

I often get calls from people offering to buy a business. Or become an investor. But even at the document review stage, you're struck by the fact that if 25 people are partners, you immediately see underlying conflict, scandals, envy, and dissatisfaction. This is the wrong format. A business should be transparent, with clear shareholders, with clear stakes, not too diluted.

Naturally, it should be profitable, located in the right, large, growing market. And the brand must be strong to generate sales.

Why buy a business? For synergy. Take your company and impose it on their own. Large, eliminating the costs you incur but retaining the sales you generate. Consequently, sales and turnover overlap. Cost savings create a synergistic effect, making the purchase of your business worthwhile.

The biggest problem an entrepreneur has when selling a business is his personal Passion for the project. How will the business function without it? Therefore, at a later stage, when the business is 3 to 4 years old, try to gradually distance yourself from it. Hire more professional, capable managers and employees. And focus solely on strategy, marketing, sales, key client meetings, and hiring. Perhaps even getting your first Dividends and the first week-long trip to Sochi. And management should be focused on running the company. The more a company is managed by management and less dependent on the entrepreneur's personal involvement, the more valuable it is.

On the other hand, without full involvement, day-to-day, the entrepreneur is normal

Business is impossible. There's a certain paradox in this. But business is a big paradox in general, and our life is the biggest paradox of all. We live in a complete paradox. When I wake up in the morning, open my eyes, I see nothing but paradoxes. We need to try to resolve them, we need to live, we need to fight. Or, as the English say, to crack the code— break the code, find the opener for this paradox.

Global practice, if we take the Anglo-Saxon model of entrepreneurship as an icon, is that shareholders meet several times a year at the board of directors, develop a strategy, formalize it, and communicate it to management. Management implements the strategy, reports to shareholders, and earns them dividends.

In Russia, especially in small businesses—and the book, as I understand it, is read mostly by beginning and mid-level entrepreneurs—this doesn't work for 250 reasons. And even at my bank, it doesn't work because the entrepreneur needs to be involved. But the most correct ratio, in my opinion, is when the entrepreneur is involved.

into business 100 percent in the first year, 90 percent in the second, 80 percent in the third, etcetera Here is my formula, write it down!

After 5 to 6 years, when the business is successful, generating sales, dividends, etcetera,

The entrepreneur can step back a bit. If they really like the business, they can remain C.E.O, but they shouldn't think about selling it. Otherwise, the involvement percentage should be lowered.

You can think about another business, seek out or develop new niches. But the less involved you are in your business project, the more valuable it will be in the eyes of an investor looking to buy it. They will see that the business is being managed without your involvement, even though your strategy and vision have given it the right impetus and energy.

I would lower the bar to 50 percent involvement. "Fifty-fifty." I think being 100 percent involved every day is difficult psychologically, physically, and morally. Although Sam Walton, who built perhaps the most brilliant business today - Walmart (after all, we don't know what will happen with Google or Facebook), was always 100 percent involved in his business.

There is no formula here, you can't find one. Everything depends on you as a person, on your charisma, energy, mindset. On the circumstances, in in the end.

When the economy is weak, there are no buyers in the market, even though it's the perfect time to buy because everything is cheap. During a boom, on the contrary, people are willing to pay a lot, expecting great growth in the future. This is psychology, and it should also be taken into account when selling a business.

I sold all four of my previous businesses. In some cases, I foresaw that the business wouldn't work out. For example, when I sold the Tinkoff restaurants, I was almost certain they wouldn't do anything with them; they were wasting their time buying them.

At the same time, the buyers believed they could grow the business. That's their right, after all; there are plenty of examples of founders selling companies that subsequently saw growth.

The seller's job is to get money for the business, the buyer's job is to find ideas for further development of this business.

Someone once asked me, "Is it fair to sell a business that's obviously unviable? Isn't that fraud?"

There's a saying: nothing personal, just business. I don't push anything on anyone. A buyer comes, I open the documents, people do due diligence, check it out. They look at it, and if they like it, they pay the money. If later, for one reason or another, something doesn't work out for them—what does that have to do with me? I sell: take it or leave it. I don't have any judgment on that.

It's a business. It's a normal human desire to monetize your time, your talent, your creation. Let's say an artist paints a portrait, and it's bought. The artist knows the linework wasn't perfect somewhere, but someone liked the work and bought it. Leonardo da Vinci, as far as I remember, didn't finish the Mona Lisa. And now everyone's so touched.

So sell your business if you're getting paid well for it. There's plenty of everything in the world interesting, try yourself in a different role.

Chapter 8

The trading business: the example of Petrosib and Technoshock

In the trading business, the most important thing is talent, because some people are good at trading, and some aren't, and there's nothing you can do about it. The sooner you realize whether you have a talent for trading, the better for you. In Russia, for some reason, it has a negative connotation, but I believe that's... A positive story.

I'm lucky to have that talent. If you don't have it, it's better not to trade. For example, Eastern peoples are very inclined to trade. But Europeans prefer to create a product, to create. We, Russians, are at the intersection of two civilizations, so, as always, we cannot be understood by the mind or measured by a yardstick.

The most important thing in the retail business is understanding the markup. Depending on the product and turnover, the markup can be as low as 0.5 percent or as high as 300 percent. There's no single formula. Everything depends on the market size and the volume of trade.

If the trading operations are very large and they take place in a competitive market, here You need to live not on margins, but on volumes. Accordingly, the markup should be small, often less than one percent. In markets where sales are small, occurring once a week or month, for example, when selling rare Persian carpets, markups can be 100, 200 percent or more.

An incorrectly applied markup is the most common mistake. Sometimes it turns out to be "working for nothing." A person sells and sells, and then discovers they've earned nothing; their costs have eaten everything up. You need to clearly understand your costs, estimate your expenses, and apply your markup based on those costs. Don't be like those hapless merchants who sell at a loss.

Using the example of my company, Petrosib, selling electronics, I remember that it was very important to monitor competitors' prices and compare our own prices with them. But we then

We worked in a special environment: on the one hand, the market was growing and there wasn't much competition; on the other hand, we were living through hyperinflation. Now people talk about 8 percent per year and clutch their heads, but back then, inflation was 8 percent per month. Money was getting more expensive.

We were taking out loans at 150 to 240 percent per annum—completely absurd by today's standards. And of course, taking out such expensive loans and living through hyperinflation meant we had to be precise and timely in setting our prices.

Pricing is crucial for a retail business. Competitors are often known to be low-ballers. I believe the last thing a smart entrepreneur should do is engage in this competitive, low-balling. I'm often asked questions like these on social media, like, "Are our competitors low-balling?"

"What should I do?" I think it's best to relax and enjoy. If they dump prices, they'll go bankrupt sooner or later. You might object, "Well, then we'll be out of the market by then too!" But would it be better if you both went bankrupt?

At least you have a chance of survival. Maintain your markup, sell less, look for new products, new niches. Bring and offer the consumer a new product, something different, something your competitor doesn't have.

Never get involved in a dumping fight.

Dumping is nonsense.

As soon as you see that there is dumping in some market, instead of fighting it, just go into another business.

We know that retail chains now have very significant purchasing power in the food sector. And they've already expanded into the non-food sector. The chains are quite it's a contradictory thing.

On the one hand, they create jobs and boost the economies of specific regions. Typically, small ones, even villages. As in the case of Magnit. This is a great thing, a great blessing.

But on the other hand, their purchasing power is enormous! They push producers to the very best prices.

They're simply killing local businesses, which can't afford such low markups because they primarily buy at higher prices, through a series of intermediaries. I see only one solution here—a more entrepreneurial one: sell a different product, sell a higher-quality product with a higher markup, sell a product not found in these chains, and find the right location.

I recently flew to Krasnodar to visit Sergei Galitsky, the owner of the Magnit chain. We discussed business, and then I asked his assistant to take me around ten Magnit stores. Incidentally, I'd never been to one of these stores before—there are very few of them in Moscow and St. Petersburg. And here's the interesting thing: almost every other Magnit had a woman with a stall selling fruits and vegetables. I approached one of them and asked:

— Do you have any connection with Magnit?

- No.

- And who are you?

— I am a private entrepreneur.

— How are you standing under the walls of Magnit, where the prices are low? How are you with him?

are you competing?

— I sell higher quality apples and home-grown tomatoes. Of course, I have them more expensive, but Magnit doesn't have that.

I told this story to Sergei Galitsky, and I was very pleased with his answer: "Here

"You see, everyone's accusing me of stifling entrepreneurs. We're not stifling them, though.

On the contrary, we're developing them. Because we really can't afford to buy those apples and tomatoes from our own gardens."

In this case, oddly enough, networks help entrepreneurship. This is what I had an example from personal experience.

The trading business is details, details, details. There's a saying in English.

In the language: "Retail is detail." Miscalculated the markup—you're out of business. Purchased the wrong product—you're out of business. Choosing the wrong distribution channel, going to the wrong retailers—you're out of business.

Using the TechnoShock chain of stores as an example, I can say that the retail business is much more stable. On the one hand, it requires more expenses compared to wholesale. I've been in both. Petrosib is a wholesale business. It requires less capital, higher turnover, lower markup—the wholesale business itself is more profitable, more attractive.

But if you want stability, and not depend on a single supplier who will change terms and prices, or the market will change and you'll be eliminated, you need a retail chain. It's more stable, but it requires investment. I think that for every dollar invested, wholesale Trade will win. But retail is more sustainable, in the language of English-language terminology. It is more stable, less susceptible to cataclysms, although less economically attractive in terms of profit.

What niches in the retail business exist today, in my opinion? I don't think there are many, and they all lie in the online retail space. Because our market is online retail, or e-commerce. Search engines, social media, and other online technologies—direct advertising, banner ads, email services—have all developed well in Russia.

Mail.ru. But from an e-commerce perspective, I can't think of anything more or less large than Ozon. I think there's huge potential in this area. People don't want to travel; they want to click and receive the goods.

Houses.

Another issue is that we don't have a developed distribution and logistics system. That's your second business, by the way. Create an analogue of D.H.L, FedEx, U.P.S, or another delivery service. goods at least within your city.

And this will be a huge breakthrough, a huge one. know-how. Because e-commerce hasn't really even started in Russia yet, but there are billion-dollar businesses and huge prospects there. The same goes for logistics.

Warehouses, Thank God, they've built it, now we need vehicles and delivery agents. All these businesses wildly ineffective. For example, I bought myself a camera at one major photo site.

It was nonsense: 35 calls, 10 people I spoke to. One agent would deliver the goods, then another would arrive and take the invoices. All of this is still very inefficient and outdated. We need to strive for business efficiency, because the market is huge.

I can't name specific promising niches because it would sound strange. Overall, it depends on talent.

If you have talent, you will find a neesh.

A huge number of businesses! Some friends of mine opened a chain of shoe stores,

They've set them up all over the country. They buy cheap in China, mark them up big, and sell them on. Their turnover is already a billion dollars, and they started with just one store. If you have talent, desire, and aspiration, you can sell anything. It would seem, shoes—how can you sell them? Everyone sells shoes; every store has them. No, these people have found their neesh, their prospects.

I'll end with what I started with: if you don't have talent, don't get into trading.

Chapter 9

Manufacturing is a business that requires investment

Once you have amassed your first capital through trade, you can start manufacturing. This The next stage. Because there's a higher markup and, consequently, higher profits.

And the business is more stable. The barrier to entry into manufacturing is even higher than in retail. You need to buy machines, equipment, rent or buy premises, etcetera A manufacturing business will require both fixed and working capital. If you don't have either, it's better to start with retail.

Banks, unfortunately, don't lend for future production; they lend for specific assets. And if there are no assets, there's no loan—it's a vicious circle.

Manufacturing, of course, has fewer details than retail or wholesale. However, it does have its quirks. Since markups and margins are higher on products you manufacture yourself, the margin for error is correspondingly narrower.

In the manufacturing business, it is also very important to determine the price correctly Control your expenses, loans, and interest. And, accordingly, set your product price in line with market competition.

I'll tell you how I did it, using "Daria" as an example. Our director tried to be rational, he came up with some price-setting schemes. He kept calculating: "Cost plus such-and-such a percentage, cost plus taxes and something else, total cost plus 20 percent, plus 30 percent"... I took a simpler approach. At the time, my family was living in America, and I was traveling.

I had a small office right at the factory; I'd go there and look out the window. And I'd see a line of customers. When there were especially many trucks, I'd call the sales department and say, "Let's raise the price by 10 percent." They'd reply, "What are you saying, Oleg? Ours is already expensive. The Daria costs twice as much as our competitors." I insisted, and they raised the price.

I see the queue isn't getting any smaller. I call a month later: raise the price by another 10 percent. etcetera After all, we did a lot of advertising, promoted the product. We could boast a successful, efficient marketing and PR strategy, and powerful distribution.

All 4.P's were met. The product was in demand. We were represented in all regions, From Vladivostok to Kaliningrad. Distributors across Russia were clamoring for our product. And one day I said: double the price!

At first, the number of trucks dropped significantly, but then they all lined up again!

The same thing happened with beer. I remember starting with a selling price of 30 cents a bottle, and eventually we ended up with a dollar. With the cost of production being 18 cents. We started with a 60 percent markup, but ended up with 230 percent. Why? The product There was a demand for beer, and there wasn't enough. If you don't have enough product in stock, don't be afraid to raise the price.

Many will argue with me after reading these lines. My judgment will seem highly questionable. But that's your opinion, and mine is: as long as the product is in stock and people are taking it, the price should be raised, not inventing all sorts of formulas or racking your brains.

There's only one formula: if the product is taking, raise the price; if it's not taking, don't raise it. If it's not selling at all, lower it, have sales. There's no point in hesitating; you need to intuitively sense the market—that's what you're a businessman for.

As a new entrepreneur, you're bound to face the problem of how to set a price. In manufacturing, markups are typically 100 to 200 percent. And then, if they take it, the price is raised until demand equals supply. Again, this depends on your production capacity. If you can produce several times more, it's better to increase the quantity instead of raising the price. But this doesn't always work.

There are such markets - inelastic ones, where even when supply increases, demand remains same. And, accordingly, the price starts to fall. You're choking on your own Song. By increasing the quantity of a product you produce, you don't expand the market, but it does eat into your markup. Ultimately, it makes more sense to simply raise the price and sell the same quantity.

This method is followed by all luxury brands - those that we see in glossy magazines.

Magazines. That's exactly how they operate. They have a 700 to 800 percent markup. They could sell for significantly less, but they understand that halving the price of Dolce & Gabbana won't produce a huge surge.

Sure, sales might initially increase by 20 percent, but then they'll reach saturation point. And they'll lose 50 percent of their profits. It doesn't make any sense.

We should strive to maximize profits, not sales.

Look at your market. If the market is elastic and price-sensitive, then you can play with such things. In my example about the trucks in the window, we were limited We couldn't make more pelmeni because of our production. So we built another plant near St. Petersburg. When we had the capacity, we changed this strategy.

Manufacturing is cool.

If you have initial capital, it's better to go into production. It's more reliable, a more profitable business than trading. But here success depends on how much you have shekels in your pocket and how much organizational and marketing resources you have abilities to not only produce a product, but also sell it successfully.

Chapter 10

Market segmentation using the example of Daria

Once you have a production facility, be sure to think about market segmentation. Let me tell you how it was for us back in the days of "Daria." We started in 1997, producing "Smak" pelmeni (dumplings) under an agreement with Andrey Makarevich. Back then, my dumpling company was still called "Nika." The "Smak" culinary program had been running since 1993 and was very popular. I realized it would be a good idea to follow in the footsteps of such a well-known brand— you can't fight television: if "Smak" is shown every week during prime time, it's already a successful brand.

At that time, there were almost no brands on the dumpling market. Everywhere they sold just Prepackaged dumplings called "Pelmeni" (Pelmeni) were available from dozens of manufacturers. How to choose? Naturally, consumers were confused. Into this murky and gray market, the vibrant brand "Smak" emerged—it was very easy for it to become memorable and a favorite among consumers.

We advertised Smak using an advertising technique called testimonials. Maria Tarakanova wrote about our commercial in the magazine Advertising Ideas: “An example

A "normal" video in our dumpling row could be a video about dumplings nsmakj. This is a video testimony: several people tell why they

They choose these particular dumplings. The result is a story about the advantages of a new product, with a detailed description and a clear distinction from other dumplings on the market. We also held in-store tastings to promote the product, and it sold well.

In 1998, we had to open a second production site on Predportovaya Street, where the entire top management team moved. We purchased a ton of new equipment and machinery, including a blast freezing system that quickly freezes the product to sub-zero temperatures without losing its nutritional value. The product is frozen to minus 18 degrees Celsius in just 20 minutes. This allows it to be stored outside the freezer for much longer than pelmeni frozen using conventional methods.

Overall, the Smak business was going well, but using someone else's brand comes with risks. Over time, the brand's owners began licensing it to anyone, including regional producers who made low-quality products. The following emerged:

For example, the sausage and chips from Smak were of low quality, and I started thinking that we couldn't depend entirely on the brand owner. I thought and thought, and then it dawned on me: "Daria," my daughter's name. A short, beautiful Russian name. Perfect for a product like pelmeni. The relationship with Esna T.M, the owner of the Smak trademark, was completely different. spoiled, and we registered the trademark "Pitersky smak" and began selling Inexpensive dumplings under this brand.

Thus, we decided to segment the market: “Pitersky Smak” - cheap Dumplings, "Daria" - expensive.

Anyone interested in how we launched the Daria brand in 1999 knows marketing in Russia. It's a textbook story, I'll repeat it briefly. We came up with The slogan "Your favorite dumplings" was used, and they decided to take a photo of a woman's backside covered in flour. The word "Daria" wasn't featured on the poster at first. However, there was a website address: pelmeni dot ru.

We placed several billboards in St. Petersburg and several in Moscow. We were involved in everything. Advertising director Mikhail Gorbuntsov and designer Andrey Kattsov. It was necessary

To intrigue people so they'd go online and watch. Some thought they were landing on a new erotic website and were surprised to see an ad for dumplings. The brand was memorable.

We understood that advertising would probably be banned, so we prepared white stripes papers to cover the most intimate part of the body. In St. Petersburg, the billboards hung for about 10 days; they were forced to take them down, but the whole city was already talking about "Daria." In Moscow More bureaucracy, and the posters were up for a whole month. The product became a buzzword in both Moscow and St. Petersburg, Russia's two largest markets.

I became convinced that the most effective advertising is based on sex, but not just sex. You also have to demonstrate the consumer value of the product. To achieve this, we aired a neutral and vibrant animated commercial on television with the slogan, "I'll indulge myself, just like in the old days, when I made my own 'Daria.'" It was directed by Oleg Gusev. The product was high-quality, premium, and sales simply skyrocketed. No one remembered how the scandal had started; everyone was talking about the "Daria" product.

For a long time, "Daria" was the main brand under which various dumplings, vareniki and other frozen foods, but in 2000 I decided to create A mid-price brand, so that "Daria" would more clearly occupy the premium neesh. We conducted extensive research with Komkon, invited Margarita Vasilyeva from Paprika Branding to help develop the brand, and the result was the "Tsar-Batushka" brand.

They launched it on the market with a bang. The video took aim at its main competitor—

Ravioli concern. They made a cartoon: the Italian ambassador comes to the Russian Tsar and offers him ravioli. The Tsar says, "These, heh-heh, raviolis will give you stomach cramps." Ravioli concern started complaining to all the authorities, not realizing that the word "ravioli" can't be protected because it's not a brand, but a type of Italian food and a common word, like pasta or pelmeni. They might as well have called themselves

"Pelmeni"! They later changed the name to "Ravioli," which is defensible. You have the opportunity to avoid such mistakes; I wrote about this in more detail in Chapter 3 of this book.

Always choose a name that is patentable.

However, the territorial administration of the Russian Ministry of Antimonopoly policy and support for entrepreneurship in St. Petersburg and the Leningrad Region sent us an order recommending that we eliminate our violations of the Advertising Law. Following the order, we began using a squealing sound in our commercials instead of the word "raviolek," a sound commonly used to replace swear words on television.

In the end, they achieved nothing, simply launching a Ravioli commercial later that said, "Dashka, scat!" We saw no point in doing anything in response, since the goal—bringing "Tsar-Father" to market—had already been achieved.

"Tsar-Batushka" became a Russian and cartoonish brand, occupying a neesh in the mid-price range. "Daria" had to be repositioned to distance itself from "Tsar-Batushka." The brand's original concept had to be abandoned, as that neesh had been occupied by another of our brands.

We came up with the slogan "Feel Free," targeting the middle class with relatively high incomes, people who value the opportunity to save time. Pelmeni at the market back then were called semi-finished products, a word that, of course,

A normal person doesn't like it. We suggested a premium name - "easy to prepare products".

In 2001, we filmed a video in America featuring my daughter Dasha. She's smiling, swinging, and generally portraying a happy child. And why is she happy? Because her parents have time to spend with her, rather than cooking in the kitchen, since they buy Easy to prepare products "Daria".

We managed to add a premium touch to the Daria brand, and even now, 10 years after I sold the business, it still commands a premium over other pelmeni. In 202, Daria evaluated its brands, and found that Daria was worth 32.5 million dollars, while Tsar-Batushka was worth 4.4 million dollars.

The "Daria" brand still holds a significant market position, 10 years after my departure, but the "Tsar-Batushka" brand disappeared from the market several years ago. Everything has its time: consumers used to be more interested in popular prints, but now they've grown tired of them.

Don't get stuck on ideas. The market is changing, and you need to meet expectations.

consumers. The idea of market segmentation is applicable to any business, and here there is

The "target audience" concept is a very valuable marketing concept. A product must satisfy the interests of its target audience; if it does, then customers outside the target segment will also follow. If even the target audience is dissatisfied, it's a failure.

By segmenting your market, you identify several target groups. They are easier to reach, different products than the universal ones, so to speak, "dumplings". The main principle separation is a price. There are people who like to pay more for higher quality.

They We need to offer such a product. Most people save money and buy the simplest, most straightforward goods. The main thing is that the price is minimal.

Then the manufacturer's task is to minimize costs and operate at minimal profitability. Some people can do that, but I don't like it. That's why I've always gravitated toward premium brands, so that consumers understand that they're paying more, but for the best. a product, be it unsticky dumplings or freshly brewed beer.

Understand what neesh you want to work in. If you can work in several, Amazing.

Restaurants offer a good example of market segmentation in the case of wine.

Restaurateurs make relatively little money on affordable wines, say, 20 dollars per bottle. A restaurant—especially in Russia—can make as much as 1,0 dollars profit on a bottle of elite wine. Everyone is happy: one saved money by buying a decent wine; the other got a great one. Smart market segmentation.

Let's talk about the restaurant business.

Chapter 11 How to Start a Restaurant Business

Restaurants are probably one of the most accessible businesses for entrepreneurs. Those who watch the show "Business Secrets" (youtube dot com U.R.L) see that we often invite restaurateurs to discuss this topic. But... I, a person who has built—and I'm not afraid to say it—ten restaurants with my own hands, would like to share my pros and cons.

Of course, a restaurant or a cafe is the first thing that comes to mind for a person who does not want to work for hire. (You all understand that working for a salary is vulgar. And that's why reading this book.) Trading requires talent, here no special talent is required, but you need to understand that this is a fairly specific area and detailed business, like any retail. At the very least, a restaurateur should love their business. If you don't enjoy cooking and serving people, it's unlikely you'll achieve anything good.

You need to love people and be the center of attention. The hospitality industry, or, as we say, is a special thing. It requires people with certain talents, inclinations.

The first and necessary condition is that you must like the restaurant business.

Second, you need to understand that the restaurant business never brings in super profits.

Although there are several successful Moscow examples, this book is written not for Moscow, but for the entire country. Moscow has Andrey Dellos, Arkady Novikov, Kirill Gusev, the Ginza group, and so on. There are restaurateurs who launch projects that break even within a year, or even six months, as in the case of Pushkin, Moscow's most successful restaurant, opened in 1999 by Andrey Dellos.

But you can't emulate such projects because Moscow is a super-consumer market. The largest number of dollar billionaires live in Moscow: 80 people compared to 60 in New York. Billionaires have families, mistresses, brothers, friends, hired managers. In other words, Moscow has a huge number of rich people.

And they're not sophisticated. They're not particularly demanding of service and quality yet; they simply don't understand it. So they simply go to the next restaurant that opens. Many restaurants break even and survive on this basis.

A restaurant is a detailed, interesting business with a low barrier to entry. I think the average restaurant payback period is three years, which is normal. The break-even point is reached fairly quickly—somewhere around the third or fourth month of operation. And a full return on investment is achieved within three to five years. The latter figure is the worst-case scenario. Globally, it's generally accepted that if the money is returned within 10 years, that's it.

It's a good business. We can easily do it in 5, and it's quite possible in 3. Therefore,

If you're inclined and eager, look around, figure out what's missing, travel abroad, and take a look. For regional areas, you can even pick up some ideas in Moscow. For a small town, you can look in the regional capital; for a village, in the district center. Even on a beach vacation in Turkey or Egypt, you can find interesting themes.

Of course, the proposition has to be unique. Everyone was building sushi restaurants, fast food joints, and brewery restaurants after seeing Tinkov's success. But you can't just run like a herd. Success, like You know, it's hard to copy because there's always some metaphysics behind it. The metaphysics of the brand, the personality, the place, the time, the team. It's not all that clear-cut. You can't achieve this by simply copying.

Come up with your own neesh, take a look. Of course, no one has been inventing anything for a long time now; everyone is looking at each other, changing things up a little, and coming up with a new product. Even Great, groundbreaking things are nothing more than overlooked or seen differently. They're simply done right.

Find an idea.

Like me, I accidentally saw a Gordon Biersh brewery in San Francisco, America. I thought, "Wow, we don't have anything like that!" I saw it through the glass and wrote down the name of the equipment manufacturer. Then I went to an exhibition in Germany, met the manufacturer, Jost Wachsmann, made a deal with him, and...

off we go.

In addition to the brewery's live brewery, I created many unique features for Russia at the time. It seems trivial now, but back in 1997, we decided to create an open kitchen so people could see the work. The brewing equipment was visible in the restaurant—it added to its charm.

Since we had enormous ceilings in our St. Petersburg restaurant, concealing the air conditioning system was difficult. It was common practice back then to hide all utilities, which cost a fortune. We initially considered hiding them, but due to lack of funds, we left the pipes exposed. Ultimately, this turned out to be a very powerful architectural move.

And besides, this is common practice worldwide; you see ventilation pipes everywhere—in restaurants, office buildings. It's completely normal, industrial. We had well-dressed, properly equipped, and trained waiters, and we had a computer system that was cutting-edge for the time. I bought the best of everything. I brought the stainless steel equipment and the sofas from America.

Can you imagine the inefficiency—why the hell was it necessary to transport heavy furniture? The salespeople are probably still in shock that some Russian bought four containers of furniture, packed it up, and hauled it away. It seems counterproductive and inefficient from a modern perspective, but where would I have found something like that in Russia in 1997? I think we bought $200,000 worth of merchandise. All of this made our restaurant different.

distinctive, interesting.

Of course, there were mistakes. We bought all the glassware in America, including the glasses. We even wrote "Tinkoff" on them. But the paradox was that in America, the volume system is pint, not liter.

And when converted to the Russian system, the numbers turned out "crooked." So, instead of the usual 500 milliliters, our glass was 600 milliliters, and instead of the 330 milliliters we were used to, it was 400. We used them slowly, but people complained. We had to throw those glasses away later. A mistake.

Copy, but not stupidly.

Non-standard kitchens, 110-volt, also had to be redesigned.

I bought everything in America because I wanted to have an American-style restaurant. But it didn't always work out that way. Sometimes we had problems with installation, sometimes we didn't meet the standards. Luckily, spoons and forks are the same here...

And most importantly, when I was a budding restaurateur, I didn't yet understand the obvious: things break, they get broken. You can't replace part of a set with another. Our tableware became inconsistent.

We couldn't buy the same tableware in Russia; no one sold it. And buying small quantities—10 plates and 20 glasses to replace broken ones—was very unprofitable and practically impossible in San Francisco. No one would do it.

The inconsistency in the dishes is another mistake we made. You see how detailed this is, A well-thought-out business. Before opening a restaurant, spend at least 2 to 3 months: think everything through, go to your competitors' restaurants, sit there, try Take a photo. Go to your favorite restaurant with a camera and take some pictures. interior details, understand how people work.

Asians—Chinese, Korean, and Japanese—are not above attending exhibitions and taking photos. This is common practice, so grab your camera and march quickly to your competitor. Especially in this age of electronics, it's easy to whip out a phone—and no one will understand. This will help you avoid mistakes.

Is the restaurant ready? Make a good, noisy presentation, feed the journalists, that's it. It always helps. Journalists like to write when they're well fed and well watered. Don't spare money on this.

Marketing and PR are crucial for restaurants. People need to know about your restaurant and come to you. So throw a raucous opening party and treat all the guests you need, from the head of the Sanitary and Epidemiological Service to journalists, to good, expensive alcohol. Yes, this will be an expense, but factor it into the same investment budget. Let's say you invested 200,000 in the restaurant, spend another 20,000 on the party—it will return a significant profit.

A restaurant chain is also very interesting. In this case, there are savings on procurement, expenses, and accounting. Each subsequent restaurant in the chain becomes less expensive, provided it generates the same or greater sales. Then it becomes profitable.

The network is very cool.

If you have earned money, business is going well, you see demand – cover it other territories, other areas of the city, other cities. We need to develop

Geographically. It's foolish to open a similar restaurant nearby or on the next street. It could kill the business of one of them, and both will suffer. It's a boomerang effect. People need to sit to create an atmosphere. People stop coming when there are no people. People come to people; when they see a crowd, they come; when there are no people, no one comes.

Often the restaurant itself isn't that good, but the owners manage to make it that way.

Promote it, hype it up so people can go there. In this sense, Novikov is a genius in Moscow. I believe that more than half of his projects are purely PR projects. In terms of both cuisine and sensory potential, I didn't see anything new among his ten projects. They're all the same. The same can be said about the Ginza Project, which is rapidly growing in St. Petersburg and Moscow. It's exactly the same thing under different guises. But they're masters of marketing and PR. Lots of people go to them.

Beautiful girls come to you, beautiful rich guys come to you, and rich guys come to you—it's a vicious cycle: a boomerang or vortex effect. People come to you. Incidentally, it's very important that beautiful girls come to your restaurant because it's an indicator of success. If local beauties come to you, other people will follow them, too.

So, take advantage of the opportunity—attract attractive young women to your place. Some achieve this with free cocktails, others with discounts, and still others through girlfriends. Necessity is the mother of invention, and everyone has their own way. For a restaurant to be successful—

There have to be people there. For there to be people there, there have to be girls there. Unfortunately, this is an axiom, not a theorem.

The restaurant business can be enormous. Arkady Novikov, who bought Versace's villa on Lake Como for $50 million, confirms this. Rostislav Ordovsky-Tanaevsky Blanco's Rosinter generated revenue of 9 billion rubles in 2010 and operates 370 restaurants.

Of course, it's very, very difficult to create such large companies, but the restaurant business certainly allows you to keep your head above water and provide for your family—to earn money for your wife and children so they can go to a decent school, so you don't go hungry and worry about how to survive paycheck to paycheck, like those people who have already put the book down and think I'm just an upstart, an idiot, and an insolent person. In reality, I just wanted to save their families from poverty, from vegetating. I wanted to suggest how to make money, being entrepreneur.

Of course, consider opening a cafe if you're not a highly-qualified lawyer, doctor, or teacher, or if you have a solid salary, bonuses, and profit sharing. But if you're just a cog in a small office, or worse, a slob in a government agency, it's better to just go and start a restaurant business.

In terms of implementation timeframes, I see it this way: thinking about it takes a month or two, preparations take another month or two, renovations, and then move-in—depending on the size, but let's take an average restaurant of 500 square meters—another 3 to 4 months, and then the actual launch. You should be able to get from the idea to the launch in, say, 6 to 7 months, or 9 months at worst. Like a child—

From the moment of conception to the moment of birth. This is the maximum period.

Accordingly, if you read this book and tomorrow you start thinking - in 9 months

The first ruble will appear in your register. And you will experience such satisfaction, such pleasure, receiving your first ruble from your first customer! Believe me, it's incomparable. Good luck in your restaurant business!

Chapter 12

Every business should be online.

I'm often asked, "What industry would you recommend starting a business in?" And my answer is short: online. Anything related to new technologies, innovations, the internet, mobile communications, services—anything that's already more or less established in the West.

On the one hand, this doesn't require significant capital to enter the market. On the other hand, it's all developing rapidly and has great, sometimes even global, prospects.

Colonel Colt, by inventing the pistol, equalized the strong and the weak. The Internet made The rich and the poor have the same chances. Without the Internet, could a poor student build a company worth $60 billion in a few years?

Of course not. I'm talking about Mark Zuckerberg's Facebook.

The most interesting things in business are happening online right now. It's breathtaking the speed of change!

I met with Artemy Lebedev, whose studio does website design, and told him what I thought about his work style (the studio's slogan is: "Long. Expensive. Awesome.")

Let me repeat briefly. It's not that you're very expensive. It's not what kind of engine you have.

The thing is, everything is happening over a very, very long time. That's why the slogan needs to be changed: "Expensive and fucking long."

If you make changes to your website three months after you decided to do so, it's already too late, because time flies, and your changes simply won't have time to take effect and will no longer be relevant. As Anatoly Papanov said: "Strike while the iron is hot."

cash desks."

In the fall of 2002, 6.5 million people used the internet in Russia. Each year, this number grew by several million, and by early 2011, the number had exceeded 50 million. This is the so-called monthly audience, meaning people who, in surveys, reported using the internet at least once in the last month.

But in reality, the vast majority of people are on the Internet much more often; 46.4 million in the last week before the survey, and 36.3 million in the last 24 hours. In 2010, the number of users grew by 9.2 million—a record increase in absolute terms. A veritable army of potential clients!

The website is the basis of everything.

Ignoring online is fatal for almost any business, unless you're a granny selling sunflower seeds at the train station.

A good, selling website is what you need if you run a business.

A good, selling website is what you need if you run a business.

The obvious thing is: Russian companies don't have many clear, user-friendly websites. You can't just throw a website together, you can't throw one together for $100. A website is a serious investment. I don't believe you can build a decent website without spending at least some money on it.

I'd like to pay a good programmer a month's salary. That's around three to four thousand dollars. That's the kind of website you deserve. Anything cheaper is wrong.

Look at the website of any American company - everything is crystal clear. The product or service is presented with a face and in a way that appeals to the consumer. They work Protestant skills imbibed by American entrepreneurs with milk mothers.

Hundreds of years of pure capitalism have taught Americans to sell like this. They don't know how to do it in other countries. And the websites are subordinated to this idea—to sell

They don't know how to do it in other countries. And the websites are subordinated to this idea—to sell.

There's no shame in it. If you're confident in your product and the client wants it, Make the decision-making process as easy as possible.

When creating your website, don't spare the time to visit American portals. companies. See how they sell their products—from the simplest pizza to complex professional services. Take the best ideas and adapt them to Russian features - and go ahead!

An online store for everyone!

The next stage of an online business is creating an online store. If your website advertises where to buy a product offline, why not offer it online with delivery? Many online stores are created this way: as an add-on to expand the core business.

Moreover, this online component sometimes ends up being larger than the offline one. You don't need to expand your offline network if your sales are online.

Clearly, online stores have a profit margin compared to traditional brick-and-mortar stores. At the very least, they don't need to rent and maintain retail space, which is a major expense for any store, along with employee salaries. Online stores also save on salaries, as they require far fewer people.

But, unfortunately, not everything is so rosy. Russia has a huge logistics problem, which, unfortunately, hinders e-commerce. The country is too big, and in some places it's empty, while in others it's teeming.

Large cities were designed long ago without any consideration for the potential for large numbers of cars. They are overcrowded: people from all over the country flock to where the money is.

As a result, there are constant traffic jams not only in Moscow or St. Petersburg, but also in many regional centers. You know what it is without me telling you. Online stores are tearing things down.

Delivery times are slow, customers are dissatisfied and don't risk buying anymore. A huge industry, in theory, is stalling.

Remote regions present different challenges. Using courier services is expensive for the customer. Regular mail is slow and inconvenient for the buyer.

A customer should receive a notice that their item is at the post office and needs to be picked up. Sometimes these notices aren't delivered for one reason or another, and a month later, if the item isn't claimed, the post office sends it back to the sender. Shipping costs have already doubled, two months have passed, and the customer still hasn't received the item.

To be fair, such cases are rare, and overall, the Russian postal system continues to function well as an infrastructure link. But trust in this method

People's delivery services have fallen, which, of course, also does not contribute to the development of online commerce.

What to do? Think.

If you have a pizzeria in Moscow, limit delivery to a few areas, located next to a pizza factory. It's understandable that it's psychologically difficult. refuse additional sales, but you are actually faced with a choice: have many dissatisfied customers throughout Moscow or earn loyalty in 10 percent of the territory.

The second option is better because satisfied customers return on their own, and finding new ones to replace dissatisfied ones will require advertising. If business takes off, you can expand it to other areas, opening new production locations.

A common problem with Russian e-commerce is cash on delivery. While this works perfectly in the pizza case described, it's a complete disaster when selling relatively expensive items.

Abroad, customers typically pay for their purchases by card. This means they're committed to the purchase and have essentially made it before the item arrives. They can, of course, cancel the order and return the money, but they're unlikely to do so because they've already paid. If the item doesn't fit, they'll choose a different size or style.

In Russia, entrepreneurs bear risks. In some online stores, the purchase abandonment rate reaches 40%. Of course, this applies to clothing and shoes, where trying on is essential. But it doesn't change the situation: the entrepreneur is in limbo, forced to use their logistics infrastructure futilely.

Despite the logistical and payment problems I described, online commerce

is growing every year. Most users have purchased something online, but often not because it's the most convenient, but because the item isn't available in brick-and-mortar stores.

Pixel trading

We've discussed the online components of a typical business, which also operates offline. But the ultimate in online profitability is making money without an offline component. This is what Google and Yandex do. They offer users high-quality and, crucially, free search, email, maps, weather, and dozens of other services. This allows them to attract massive traffic and sell advertising, trading pixels, making money out of thin air.

This model is very beautiful, but not everyone can replicate it. To make the site interesting for advertisers, there should be hundreds of thousands or millions of visitors per month. If there is little traffic, you will have to place contextual advertising from the same Google, Yandex or Begun, but you won't earn much from it, since payment is only for clicks and you have to share with the contextual system.

In other words, to make a decent income from advertising, you need a lot of visitors. Or you need exceptionally high-quality content for a narrow audience, access to which the advertiser is willing to pay. An example is the websites of business publications. In terms of traffic, they are significantly inferior to many online resources, but their audience is so high-quality that advertisers are willing to pay higher rates. This means that a high-quality neesh information and service project can make money from advertising.

All analysts predict a sharp increase in online advertising spending, as we are currently seeing a shift towards television. In the U.K, for example, advertising spending

On the internet, they've caught up with T.V, but in Russia, they're still an order of magnitude smaller.

Meanwhile, the audiences of the largest portals are quite comparable to those of television. What follows from this? In the coming years, the distribution will become more equitable and will grow impressively.

the amount of money spent by companies on the Internet.

Which ideas should you choose? Look at what's successful in the West. Take comparison sites. are very popular in England, a little less so in the States. Albert Popkov, who made Odnoklassniki launched Sravni.ru. Without further ado, I created a tracing. And the website has prospects in Russia.

So, you should also look at what's working there, on the other side. Here, it'll bring in at least a few bucks. And for those with brains and the appropriate education, a lot will happen at the intersection of different technologies (the internet, mobile phones, T.V, etcetera). But that, I think, will happen further down the road, in five years.

Is it possible to sell content?

Another direction is selling content to the end user. Here, Apple is working wonders and setting the trend by selling music through the iTunes Store. What's the secret?

Apple? It's because it's made the process of people parting with their money enjoyable and technologically advanced. Everyone pays a little for the content they're interested in, generating billions of dollars in revenue. Meanwhile, producing each new piece of electronic content, as you can imagine, costs nothing: making and delivering a CD is much more difficult than providing a link to download a file.

This opens up new opportunities for the music industry, which has been in crisis for the last 20 years. Let's say you see a record in a New York store for $15. Of that, the most important person—the one who wrote the music—gets one dollar. The rest is divided among the record label, the store chain, goes toward production, and so on. It's an absurd situation. Everyone makes money, but not the creator.

Now everything is simpler, you can sell content yourself through your website on the Internet, through social networks, through large platforms like iTunes, paying a reasonable commission of 30 percent of the revenue, or even giving people the opportunity to download for free music by making a voluntary payment button. That is, the Internet gives the opportunity a creative person can earn more.

Create valuable content and convince people that it is valuable, and you can make money. Music is one example. Market research, ratings, etcetera can be sold in the same way. Stories, novels. Any content.

But be careful: there's a ton of free, high-quality content online right now, so consumer demand for paid information—even if it's higher quality—may be low. Research your target audience and their needs, and you'll be happy.

In our country, selling any content online is a constant battle against piracy. "Online means free," 80 percent of Russians admit to thinking, and perhaps as many as 95 percent actually believe this.

The so-called freemium model, currently popular in the West, could be a solution. Its essence is that the user receives a basic service or basic information package for free. Advanced packages cost money; the more advanced, the more expensive. This model allows services, on the one hand, to monetize and generate funds for development. On the other, they gain a large customer base that can become paying customers.

This approach is very popular in America. The key here is to find the balance between the functionality of the paid and free versions. The free version shouldn't just be The advertising version of the main one must also provide benefits to the client, otherwise they will feel cheated. And if the client liked the free service, they will pay when they really need the missing features. For now, selling content in Russia is generally risky; too few people are willing to pay for it.

pay.

4.P: online version.

What's so good about the internet for business? It's not about money, it's about ideas. And no amount of money can fix a weak, ill-conceived idea.

I see ill-conceived online businesses all the time. People online forget the marketing formula. That same 4.P formula we learned in Chapter 2: product, price, place, promotion.

It is necessary to clearly understand what kind of product it is and what added value it brings to the consumer. If it's a service, then it should be the most complete, or the fastest, or the cheapest. Maybe not in the world, maybe not in the country, but at least in your city. You can't have a competitive advantage in everything, but there must be points where You can claim that you have the best product on the market.

Online pricing shouldn't just be defined as the price in rubles or dollars, but also the monetization model. Who will you charge? The service's consumers? This isn't always possible, as intense online competition has spawned many free services, and you know how much freebies are loved in our country.

Making money from advertisers? With this approach, the site doesn't charge for services or information, but the presence of visitors allows it to sell advertising. Offline, this scheme works on broadcast television and with free newspapers. Advertising monetization.

Or are you looking to raise money from an investor? Then you can provide a very high-quality service for free and not bother users with ads. And wait for Google to call and quote a figure with six or seven zeros. But even here, the risk is significant.

The portal could create a similar service itself, taking into account your mistakes, and you'll be left holding the bag, along with a bunch of users accustomed to good service.

Place — distribution, logistics, payment methods. It should be efficient and convenient. Preferably, in one click.

And finally, promotion. Remember, a brand is not what you think of a company, but what the customer thinks. Create a brand that the consumer thinks of it first.

queue, and his fingers automatically typed the domain name into the browser's address bar. Then monetization won't be long in coming.

Chapter 13 Our Mobile Future

Viktor Tsoi sang, "Our future is fog," but I'll tell you that our present is online, and our future is mobile. As the Americans say, The Next Big Thing—

The next big story is, of course, mobile, mobile online via phones, smartphones, communicators.

My daughter Dasha is studying at Oxford. I always ask her how things are there. She says, "Dad, we only send emails to our parents." They use different messengers, Facebook, and S.M.S messages on their smartphones.

Recently, a conference was held by the famous reporter Tim O'Reilly. Speakers there

Many Internet leaders. They've talked about it a lot. There are so many projects—it's scary.

It's happening! Everything revolves around mobile phones. Mobile traffic in Russia is growing faster than usual, but there's no breakthrough yet. And there could be significant revenue there. Internet-based advertising, like

Google AdWords, hasn't been implemented in the mobile segment.

There will be a major breakthrough, creating billions of dollars in fortunes in the coming years.

Of course, the limiting factor in Russia is the monopoly of our three mobile companies. They meet in the Kremlin and tell fairy tales about how they're lowering roaming prices. But we need to understand that they're holding us by the balls.

It's essentially a monopoly. Three operators—that's unheard of anywhere. When I talk about markups of 50, 60, 100, 200 percent, it's a joke. I assure you, mobile operators make astronomical amounts of money, at least from voice roaming and data.

Colossal amounts of money are being made.

Many companies are already developing and supporting free apps en masse. Why are they doing this? It's clear that they ultimately want to sell ads there. Sooner or later, you'll see a lot of ads there, click on them, and generate revenue for the app owner.

That's where it's all heading. Perhaps there will be some kind of convergence between the mobile phone and the credit card. People will be able to pay, for example, by tapping their phone.

When it comes to mobile business, a wide variety of geo-applications have potential. These are programs that use the internet and G.P.S to determine your location and display relevant and useful content, such as nearby locations of your friends or discounts.

In the West, the leader in this sector is Foursquare. Facebook has begun developing its service. Places. Gowalla, Altergeo, and others are also active. The sector is quite interesting.

The main thing is Come up with an idea that will make people use the app again and again. And if people come, there will be monetization, either through advertising or by selling the business.

The mobile sector is attractive because the "sitting at home by the T.V" paradigm is disappearing. Why? Why should you sit at work, then go somewhere, get in your car, come home, and access the internet? That's stupid. Everything will be mobile, on the move. In many Western countries, mobile traffic already exceeds regular traffic.

Russia is moving in the same direction. Those same mobile operators offer internet access plans for 200 to 300 rubles. rubles per month, albeit with a speed limit. But the prices are such that it's already a mass service, accessible to many people. So it's just a matter of time. The most savvy audience already prefers smartphones to computers, and this approach will only grow stronger.

Another big story: the complete convergence of television with the Internet.

Televisions with internet access are being released, and T.V programs are streamed exclusively online (tinkov dot com U.R.L). We can watch videos from the internet on a regular T.V without leaving the couch. We can surf the web without using computers or mobile devices—everything is on our T.V.

We can watch T.V programs broadcast over the Internet in high definition on our mobile phone right in the car. For example, I do this when I drive affairs.

Convergence creates entirely new opportunities. For example, you're watching a program about Kruger Park in Botswana, and underneath there's an ad: want to go there? You click, and agencies offer tours. Targeted advertising, based on the content you're interested in. Not some abstract ad, but exactly what you need.

Technology is expanding targeting capabilities across the board. This means advertising will be cheaper and more effective; you don't have to shoot at sparrows with a cannon; you need to interest those who are mentally prepared to buy a product or service.

For example, my mom watches T.V. She doesn't need to see the latest Volvo model.

or a mur-say-dees. She needs to spend money like "Auntie Asya." Internet television will give such an opportunity. Everything will be targeted, Mom will watch Auntie Asya from morning until night. And

I will watch Rolls-Royce commercials, as I am supposed to. I am not interested in Auntie Asya; I would never buy washing powder anyway. But today, such targeting is not yet possible; it's just a mindless bombardment.

Social media and mobile operators possess invaluable information about what people prefer. For example, if someone interacts with wealthy people, they are likely wealthy too, and it's profitable to show them ads.

People ask me why I don't do business online. Whoever asks this question is deeply

He's mistaken. Tinkoff Credit Systems Bank is essentially an online company. Not only in terms of how we attract and service clients, but also in terms of how investors view the bank. They value it at 5 to 7 times their equity capital—a huge multiple for traditional banks. Why? Because our infrastructure allows us to rapidly grow our business without significant investment. We're not burdened by office infrastructure and can serve millions of clients with a very limited number of people.

At the same time, I don't like doing the same thing over and over again; I get bored. I want to prove to everyone, including myself, that I can do something different. I want to create, because I'm an entrepreneur. My next business could be entirely internet-related.

I'll sell the bank and start an online business. Durov did it, Milner did it, Volozh did it, but I couldn't?

Chapter 14

How to hire the right people

At the initial stage of a company's development, an entrepreneur often has to combine different positions—he is the C.E.O, the owner, the sales director, and the H.R director all rolled into one.

Don't let this scare you: going through all the stages of the business process yourself is a useful thing. This is the only way to find out what works and how. And then, to put it mildly, no one will fool you or tell you fairy tales like, "It can't be done, it doesn't work."

If an entrepreneur initially does everything themselves, then gradually, as the company grows, they must begin delegating. They'll need to hire their first, second, twentieth employee. And if the business grows successfully, the time may come when the workforce reaches 10,000! This is where one of the entrepreneur's most important functions comes into play: hiring. Your job is to delegate operational functions to hired staff and supervise them.

However, I would like to warn aspiring entrepreneurs against overstaffing. My Success has always been built on strict cost savings and tight cost control. I've never tried to overstaff, especially now at Tinkoff Credit Systems.

Compare: in the 1990s, the payroll fund sometimes amounted to 2 to 3 percent of costs, while today it's 30 percent, sometimes even 50 percent, depending on the business. Naturally, hiring each additional person is a major expense, a serious decision. Hiring should be done only when absolutely necessary! Although there are sometimes successful entrepreneurs who sometimes practice unreasonable staff increases, yet are still very successful —like Oleg Leonov of Uniland and Dixy. He was able to increase market share and make money with a large number of employees. I haven't.

You might ask: How do I know when it's time to hire a new employee? In all my businesses This is usually how it happened. If a person works until 12 o'clock at night, because he ineffective and unable to complete the required volume by 7 pm, hire a new one an employee is not needed. If a person works until 12 midnight and gets up after work, he falls and loses consciousness from exhaustion - it looks like it's time to hire more help one.

You'll see managers always crying about how they have too much work and asking for help —that's perfectly normal. I, for one, wouldn't look at that. We need to hire as little as possible! When we're exhausted, that's when we hire.

At the initial stage, it's definitely better to recruit people through connections, interviews, and meetings. As a business with a turnover of hundreds of millions a year, I'm not a big fan of recruitment agencies. They're expensive, to say the least. Although, of course, I use them for key positions.

If you're hiring mid-level, operational staff, say a call center representative, you could post an ad on, for example, headhunter.ru. People for more senior positions are, of course, recruited and lured away. It would be at least odd if a bank vice president posted an ad online seeking employment.

If you're just starting out, look for candidates through your connections. I really liked the president's answer.

American bank Goldman Sachs Gary Cohn, the second person after the chairman of the board of directors Lloyd Blankfein.

When I asked him how Goldman Sachs manages to build its recruiting policy so brilliantly and achieve such good results, he replied, "You know, we don't have an H.R department." This left me shocked. He went on to explain, "When our employees meet with contractors, partners, and potential clients in the marketplace—and they have dozens, hundreds of meetings—they act as our human resources agents."

Resources. Employees return to the office and share information with their colleagues. "We were at a meeting today and saw such-and-such a person; they're clearly talented, smart, and interesting. It would be a good idea to consider them," they say.

"If there's a vacancy, they try to invite the person they've noticed to an interview, a job offer." So, as it turns out, even such advanced companies as Goldman Sachs aren't very keen on using agencies.

Here's an example from the richest bank in the world. Meet, talk, look at people. Try to interest them, inspire them, attract them, and persuade them to work for you. This is a difficult, non-trivial task, but it is worthy of a great entrepreneur.

psychologist.

Most of the people at Goldman Sachs and McKinsey are phenomenal. Although McKinsey uses a different approach: they prefer to work with students. They mine the diamonds at the educational stage.

McKinsey typically conducts numerous recruiting sessions and presentations, working with university professors. They try to find the most talented students and engage them at minimal cost. Over time, the students grow.

Most, of course, leave. Nevertheless, this conveyor-belt policy has proven itself and is effective in the field of strategic consulting.

By the way, after the above-mentioned conversation with Gary Cohn, I am trying to get a loan from Tinkoff Bank. Credit Systems is encouraging top management to look out for "stars" when meeting with our partners. This is especially true now, when there's a shortage of online talent. There's a shortage of people who understand online processes and internet business technology.

But so far, we haven't hired anyone... Unfortunately, this is a characteristic of the Russian mentality: Our people aren't prepared to raise their own competitors. Here's a top manager with a salary of, say, $300,000 a year plus bonuses.

What if he hires someone smarter and more talented? That's a threat to his salary.

In Western companies people are more self-confident, not afraid of competition and even they welcome it (although there's plenty of nastiness within companies there, too). I hope this works in some Russian organizations, too. But not yet in my bank.

Once you've found a candidate for the vacant position, the next task is to conduct an interview and determine whether the person is suitable and can perform the specific job.

Interviewing is an art, a talent, the ability to properly conduct negotiations.

It's psychology. When the company grows to a higher level, you will be able to

Afford yourself a head of human resources, that is, an H.R specialist. Someone who's at least a little familiar with Jungian theory, has read Freud at least cursorily, has an understanding of cognitive dissonance theory, and has a basic understanding of the collective unconscious. Until such a person is available, you'll have to become a psychologist yourself.

When I interview, I like to provoke. I generally like to provoke and be provoked. Provoke me! But, unfortunately, in our Russian-Soviet There are few provocations in the swamp. This applies to communications, advertising, marketing, journalism. When you provoke a person, you take him to another level.

Trajectory different sensations. It will unfold differently.

trajectory, different sensations. It will unfold differently.

For example, it's funny to say the word "dick" to an intelligent girl during an interview and watch her reaction. Some unexpected qualities will emerge that you may or may not like. Soft-spoken young ladies "swoon."

But just because a girl is shocked by the word "dick" doesn't mean she's a bad employee. On the other hand, if a very sweet, intelligent girl with two degrees immediately responded to your attack with "No fucking way," that speaks to me of her good nerves, ability to react quickly, and self-defense. In general, it only speaks positively of her. She's able to control her emotions, can pull herself together, and find an answer to a provocative question. Here's a specific trick for conducting an interview.

interview.

By provoking people, you can draw out insights or some internal feelings. After all, in interviews, unfortunately, in 80 percent of cases people lie. They

They try to please. They comb their hair in a way they wouldn't do in everyday life.

They dress in ways they never wear before, and so on. For some reason, it's generally accepted that you should look exactly this way at an interview, and no other. Candidates are playing a game with you. Your job is to unsettle them, to force them to play by your rules. Ultimately, you need to understand whether this doll in a tie can work for your organization and bring you profit. Is he or she capable of adapting and embracing your corporate culture.

What kind of person would I never hire? Obviously: someone with a tarnished reputation. That's a complete no-no for me. Especially if they stole at a previous job.

In Russia, unfortunately, kickbacks and theft are common practices. Even the slightest suspicion, even rumors of dishonesty, are a deal-breaker for me. Hiring such a person is absolutely out of the question.

I'm also very wary of overly religious people. And it doesn't matter what kind of beliefs they have—Orthodox or sectarian. Religion is an intimate, internal component. And if someone flaunts it in an interview, something is out of balance. They're trying to show something, usually that they

Honest, decent. But in reality, the opposite can be true. If a candidate states three times during an interview that they're not interested in money, the probability that it's what interests them most in life is 85 percent. If they repeat three times in an hour that they're very honest, the probability that this isn't true approaches 100 percent.

I also don't like hiring the children of "cool" people. Although there are some among them, of course, There are exceptions: there are smart, professional ones. I don't hire relatives.

I've already tried working with cousins, as I discussed in my previous book, "I'm Like Everyone Else." It's better to help loved ones financially, but a joint business is not for me. I try not to consider connections. My standard answer is: call our H.R department, send us your resume, and we'll consider it.

Exceptions are only for students. I help friends if they ask me to take their child on for an internship during the holidays. In Russia, the practice of hiring schoolchildren and students is not widespread; there are legal restrictions.

There is no well-established model like in the West. So, when friends call me and ask for their daughter or son to work for a month or two, I gladly do it. Because I respect such parents. It's a very good idea to introduce teenagers to work. By taking on such children, I'm trying to contribute to a system that hasn't yet been built in Russia.

In the summer of 2010, the son of one of the main managers worked in our call center for a couple of months. Roman Arkadyevich Abramovich's partners. It wasn't publicized, no one knew anything. I simply asked the H.R department to hire him. The guy worked hard, then left—well done. His father has 350 other opportunities, but he wanted to work for a "foreign" company.

Many rich new Russians think correctly. In the summer of 2011, during vacation, my My daughter Dasha worked at the call center at Tinkoff Credit Systems. It was her debut. I wanted to keep an eye on her at first, so I chose T.C.S Bank. And starting next year, I'll be sending her out to work for the summer at other places.

organization. Let him experience what it's like to work under purely market conditions, without any organization. Let him experience what it's like to work under purely market conditions, without any concessions or privileges.

If you've been fortunate enough to build a strong team, how do you maintain it? Why do talented managers often leave their owners? In 90 percent of cases, it's because the right relationships haven't been built.

I won't boast, I am a person with a complex character, like many entrepreneurs.

And the manager you hire is also, as a rule, a self-sufficient person. Especially if they're smart and talented.

And two talents don't coexist easily.

Tempers and misunderstandings are inevitable. I've often encountered this myself. What should I do? I can't give clear advice. I, for example, am trying to tame my pride. And for an entrepreneur and effective manager, it's off the charts.

The entrepreneur thinks that he created everything and that thanks to him everything functions.

The manager thinks: “If it weren't for me, there wouldn't be anything here at all. But it seems like I

I receive a fixed salary. Sometimes a bonus. And all the upside in terms of equity—the company's value—goes to a person who isn't always involved in day-to-day management.” At the same time, the manager forgets that the entrepreneur initially bore a colossal risk by investing his funds. He lives with this risk and is nervous. But the manager is a priori not ready to do this, even if he has accumulation.

However, such conflicts arise all the time in various businesses. I can't prescribe a universal pill for this. Read old Freud.

Chapter 15

About communication with employees

Probably every businessman and manager often faces doubts: should they maintain a distance from their employees or be on equal terms? There's no clear answer here either. Some people require equal treatment.

Others reject this. The second category exists largely "thanks" to the 70-year legacy of communism and the Sharikov mentality. Some, although they may communicate on the same level, will clearly understand that the boss is the boss.

For example, I know how to be on equal terms and at the same time keep my distance. I can calmly communicate with Friedman, while understanding that we are in different weight classes. I have There were cases when I let an employee get too close to me, trying to be so familiar with them, as they say. And then I experienced the most negative consequences. The person crossed a line.

What I absolutely do not accept is emphasizing social status. I am very

I'm a liberal person and I think it's wrong. However, when we fly with our banking company of 15 people on a plane, I choose business class for myself, because that's how I'm used to and I always fly. The fact that my team and I have to fly in different classes is wrong; it's demotivating.

I sometimes feel ashamed myself. But I try to be realistic in everything. There simply aren't any seats in business class for a large group, and besides, it's not cheap. If I fly economy class with everyone else, it will be natural flirting and familiarity. I do not accept cheap popularity.

Why would I betray my principles? Emphasizing my social status is foolish. You can be a boss and still be on the same social ladder. I don't see any problem with that; on the contrary, it's the key to success.

Incidentally, I do sometimes fly with my employees. For example, in June 2011, two dozen bank managers and I flew to the Astrakhan region for a fishing trip at the Kovcheg base. I didn't take business class; I flew in the general cabin and felt great. In the West, entrepreneurs often profess modesty, even asceticism.

Let's take as an example the founder of Berkshire Hathaway Warren Buffett or Ingvar Kamprad from eye-kee-uh.

The first one eats fast food because that's what he's used to, and dresses very casually. The second one doesn't fly business class, carries his own luggage, and generally makes a point of thrifty. "How can I demand frugality from those who work for me if I live in luxury myself?"—that's Kamprad's philosophy.

For their business, this behavior is logical and appropriate. Investors who invest in Berkshire Hathaway shares are more relaxed because they know that Buffett is used to thinking a penny, and Kamprad, thanks to his personal asceticism, built a unique company, offering cheap but high-quality goods. It's unlikely he succeeded in doing so,

If he changed his hundred-meter yachts every year. Like priest, like parish: at eye-kee-uh, everything is done for maximum efficiency—to make the cheapest possible product of normal quality available to the customer—so that the company can earn money and grow.

Russia also has some very modest entrepreneurs, such as Andrey Rogachev, the founder of Pyaterochka. But, unfortunately, Russia is full of other examples, disgusting and appalling, of a kind of sultanism. We have many Eastern ancestry and Eastern religions among our businessmen. And this sultanism manifests itself not only in their relationships with subordinates but also with their colleagues. I really don't like this; it smacks of Asia. This is one of the reasons why I don't like the business climate in Russia. They earn three kopecks, and immediately begin to rely on their social status, their class.

Everything should be V.I.P, different. People should sit separately, eat separately, fly separately. I find this repulsive.

I prefer to address my employees informally. My name is simply Oleg, without a patronymic; I don't like that. Some employees, either out of respect or because of my age (I'm getting old!), call me formally. I try to correct them, but I can't retrain them.

Although, I once caught myself addressing one of the oligarchs as formally formal. At least, when I first met him, I addressed Mikhail Maratovich Fridman, Roman Arkadyevich Abramovich, and other billionaires only formally. There's no Asianism in this case, just respect for their capital and their position in the global entrepreneurial rankings. With Gref

I also prefer to speak formally, although according to socio-demographic The formal "you" is perfectly acceptable. He's only four years older than me.

I don't like dividing people into classes. I don't care what kind of car they drive.

a person travels or what class they fly in on a plane. Maybe because I'm in America lived. The owner of Levi's (the jeans we all dreamed of buying in the early 1990s) lived next to me, and on the other side was Sean Penn. And we communicated as equals. Me

I get annoyed by V.I.P signs. Or when they drive with flashing lights and everyone stops. Why should I

Stop when some idiot is driving by? I'm not talking about the president or the prime minister—they can afford it given their status. But we have hundreds with flashing lights.

I like the American model: "Hi, Joe!" By the way, it's informal with the boss. It motivates many employees. So I encourage you to communicate informally!

An entrepreneur, a boss is obliged to communicate not only with immediate

I communicate with my subordinates, the company's top management, and even with line employees. I do this often; I go to the call center. People love it. And I encourage you to do the same.

You'll receive unfiltered information straight from the horse's mouth, "from the front." My email address is always open. I think that's the right thing to do.

If someone isn't right for you, sooner or later you'll have to part ways. There aren't many like

Makarenko among us. I'm not much of a teacher either; my Siberian roots get in the way. In Siberia, everything was always honest, straightforward, and straightforward. If I'm convinced someone is doing something wrong and I realize there's no turning back, I just fire them, and I try not to drag it out. I probably make a mistake sometimes because I don't try to understand, fix, or wait. Breaking up is always painful.

It corrodes like rust corrodes iron. Or like gangrene—the entire body is affected. It's better to cut off the diseased flesh immediately. But sometimes it turns out that the flesh was healthy, but you, unfortunately, have already cut it off... I'm a sinner, I repent.

I would advise you to do the same with people who work poorly or who do not accept your company's values. Maybe the person would be a better fit elsewhere. Business is not a school. There's neither the time nor the desire to re-educate.

I'm often asked questions about how to find the right people for a project and assemble a reliable and effective team. If I knew definitive answers to such questions, many would become billionaires after reading this book. But I think maybe five percent, ten percent at most, of my readers will become dollar millionaires.

Perhaps you will be one of those who will share in this share!

Chapter 16

Where to get money for business development

This is probably the most common question I hear. And perhaps the stupidest, because there's no definitive answer to such questions.

Money is not given out for free even to seasoned entrepreneurs who have excellent track record. And why on earth would anyone finance some kid's dubious project?

If the boy only counts on his uncle to invest in his project, and then

If he complains that no one wants to lend money, then he is not an entrepreneur, but a freeloader.

An entrepreneur achieves everything through sweat and blood.

He must first prove to the investor his ability to earn money, to deserve it.

Trust, and only then ask for money. If no one wants to give money, then maybe they're not an entrepreneur at all? Why would anyone believe in the idea of a boy who hasn't shown anything in life yet?

If you don't have a track record, it's very difficult to find funding. What then?

What should you do? Build that track record. There are plenty of businesses you can start without investment, such as professional services, or even hired work where you can earn your first capital. Prove to everyone, and especially to yourself, your worth if you dream of your own business.

If you've got a positive track record, you can try raising money. Of course, no one will give it to you for free, but that's what entrepreneurial spirit is all about: finding and convincing investors. In my book, "I'm Like Everyone Else," I detail how I tried unsuccessfully to find investors for my brewery back in the second half of the 1990s. It didn't work out, otherwise I would have become a dollar billionaire long ago.

But I found money in 2003, when I started building a large plant in Pushkin. I built it with borrowed funds and then sold it for a very good price. The main thing is not to give up when things go wrong. Before they give you money, you have to go to a lot of people and listen to them.

a lot of refusals.

The three Fs are the most likely to raise money: friends, family, and fools. It's a common expression when talking about investing in a budding entrepreneur's startup. But even fools won't agree unless you can convince them.

An investor is more likely to give you money if they see that you're truly passionate about your idea and can prove its viability. Of course, success can never be 100% predicted, but believing in it before launching a project is essential. If you don't believe it, look for another idea.

Show that you fully understand the market you intend to operate in.

Nobody wants to finance amateurs, not even friends and fools. You need to thoroughly understand your topic and demonstrate it to the investor.

Don't overestimate your financial needs. It's better to borrow 1 million rubles than not to borrow 10 million rubles.

Now, a little background. Financing can be equity or debt. If you know, skip to the next paragraph. In the first case, you give part of the company to the investor in exchange for their money.

That's the downside. But the upside is that you don't have to give up the money. With equity financing, the investor takes on the same risks as the entrepreneur, sitting down with them in the same boat.

In this case, the investor's potential income is not limited by interest The rate is the same as in debt financing. Here, too, the investor will receive nothing if the business goes bankrupt, but at least they understand the loan term. Debt financing is more comfortable for investors who are less risk-averse.

If you're a young entrepreneur (I don't expect to see Vladimir Lisin or Mikhail Prokhorov among my readers), you have no choice. If someone is willing to lend money, they'll set a condition: family members or friends will likely lend it, but outside investors, whom we conventionally call "fools," will probably ask for a stake in the business, often a controlling stake. He who pays the piper calls the tune.

decision - to agree or not.

I raised my initial capital by traveling abroad as a shuttle trader—to Germany, Poland, and Singapore. But I've always been faced with the challenge of raising money for business development. Growing solely through profit is very slow, and I want to grow quickly. Growing a business, whether it's a chain of stores, a brewery, or a credit card bank. So, I'll share how I solved the problem of raising funds for the development of Tinkoff Credit Systems Bank.

I invested my own money, obtained from the sale of the Tinkoff brewing business, into starting the business, and planned to raise borrowed funds for development. But it so happened that in 2007, Goldman Sachs, the world's largest investment bank, expressed a willingness to invest in the bank. Any business would envy such a shareholder. Their presence is a kind of seal of approval for other investors, as

Goldman Sachs meticulously vets the companies it plans to invest in. Goldman Sachs also has extensive investment experience worldwide, making its representatives' advice invaluable.

If Ivan Pupkin offered me to become a partner on the same terms, I would I told him to go to hell because Ivan Pupkin is no good for business. But it's stupid. reject the Goldman Sachs option. It's a win-win situation where both partners win when 1 + 1 = 3 . Goldman Sachs is happy with its investment - its portfolio It costs three times more, and I understand that the Goldman Sachs name made it easier for the bank talk to other investors.

Tinkoff Credit Systems acquired its next equity investor in 2008.

This is Vostok Naўta Investments Limited, a fund owned by the Lundin family, one of the wealthiest in Sweden. I met Lukas Lundin through Goldman Sachs, and without a second thought, he bought 15 percent, valuing it at 200 million dollars. In other words, he gave us 30 million dollars. That was the end of my dilution of my stake in the bank.

The top managers also have options, but I have two direct co-owners—both tier-one global investors. There were other offers, but we either couldn't agree on the price, or I didn't think the company needed such a co-owner. I have mid-2011 68 percent, Goldman Sachs – 15 percent, Vostok Naýt a – 17 percent.

Incidentally, both shareholders believe that business in Russia has good prospects. In addition to its stake in my bank, Vostok Naýt a has invested in the agricultural company Black Earth.

Farming, TNK-B.P (Russia's 3rd largest oil producer), RusForest

(wood producer). Goldman Sachs has acquired stakes in 18 companies in recent years.

companies in the C.I.S. As you can see, I'm far from the only one who was able to attract such famous shareholders. Maybe you can do it too?

The bank raised the rest of its funds solely on the debt capital market. In October 2007, we placed ruble bonds worth 550 million rubles. Some considered this a failure, but I believe that for a bank that had essentially never even started operating,

Attracting money without collateral is already a priori a success.

In December 2007, we received a syndicated loan from shareholders Goldman Sachs, Vostok Nafta, and Blue Crest, which joined them, for 1.5 billion rubles. It seemed that this would be the last money raised on the market. Even then, the global mortgage crisis was underway, and Russian companies had stopped receiving loans. However, in June 2008, a small window opened on the market, allowing Tinkoff Credit Bank

"Systems" managed to jump on board. We placed three-year Eurobonds for 70 million euros at 18 percent per annum. Expensive? Yes. But what were the options?

After all, business needs to grow.

The window on the capital market quickly closed, and the crisis came to Russia. It became obvious that Western capital will be inaccessible to Russian companies for quite some time. The domestic market was in shock from defaults by private issuers. Investors turned their backs, if not their asses, on bonds.

When planning your business, you should always keep in mind that force majeure and crises are possible.

Of course, I didn't imagine raising money would be so difficult. But the bank had already reached such a volume of operations that it could exist and generate profits without new resources. Since we couldn't borrow, the bank grew slowly in 2009, maintaining assets at around 6 billion rubles. In 2010, we began collecting deposits through a special online program (tcsbank dot ru U.R.L) and managed to build a portfolio of 6 billion rubles. And by the summer of 2010, two years later, we were already borrowing rubles on the wholesale market.

In July, we placed ruble bonds worth 1.4 billion rubles; in September, another 1.6 billion rubles. We managed to place two more issues of 1.5 billion rubles each in November 2010 and February 2011. And in April 2011, we borrowed $175 million at 11.5 percent for three years. A very good result for a small bank.

After all, we had been unable to enter the Western market for almost three years, and then this happened. Sixty-three investors from Europe, Asia, and Russia participated in the purchase of the securities.

This deal will allow us to increase our credit card portfolio to 20 to 22 billion rubles by the beginning of 2012 and take fourth place in market share.

Always weigh the type of financing you prefer. It depends on the business. Equity financing is free money, but it also means a loss of independence.

Debt—the need to repay loans or redeem bonds, that is, withdraw cash from the business. There is no one-size-fits-all solution; each case is unique, and each entrepreneur must decide for themselves how to attract capital for growth.

By the way, a company merger is also a form of equity financing. Your stake in the larger company will be smaller, but if it's worth more than your stake in the parent company, the deal is a success. If it's worth less, you're screwed.

It's better to have 10 percent in a $100 million company than 100 percent in a business that's worth nothing.

We always prefer longer-term debt, even though it's cheaper to borrow short-term. But the risks multiply. Everyone knows of banks that borrowed on the interbank lending market to invest in long-term projects like mortgages or corporate loans.

It's a dead end. The first whiff of a crisis destroys such schemes within days.

I was never a banker until I was 40, but I understand that the length of the commitments should match the length of assets. We're trying to get rid of short-term debt and convert it to long-term debt, which I advise you to do too. For example, part of the money raised by the bank in 2010 directed the early repayment of the Eurobond issue and the syndicated loan maturing in 2011.

If you are developing a business with payment in rubles, and for its construction you took out loans in

Foreign currency is very dangerous. What if the currency suddenly appreciates? You won't have enough money to service the loan. That's why Tinkoff Credit Systems Bank has made it a rule to hed all foreign currency borrowings.

Hedging, a kind of insurance, costs money, but even if the dollar cost 100 rubles, this will not in any way affect the bank's ability to return 175 million dollars to investors in April 2014.

Be aware of currency risks!

In 1998, they ruined many entrepreneurs. In this chapter, I showed you from my own experience that sometimes it's better to raise money from partners, and sometimes from creditors.

At the same time, we must remember that sometimes it is easy to borrow money on acceptable terms.

impossible. In such cases, there is only one way out-organic growth. A business, even a small one, must generate positive cash flow. When starting out, calculate what you need

Have a sales volume that will make the business self-sufficient. If this volume seems large, consider whether the project's risks are too great. If the volume can be achieved relatively easily, then you're on the right track and can earn money even without additional investment.

Finally, we should not discount such types of financing as trade credit.

A deferment. The partner will agree to this, because he also needs sales. But on one condition:

He must trust you.

I had a partner like that at the very beginning of my trading business, Andy from Singapore. He lent me some equipment so I could build a container and ship it to Russia. He went at risk, and I will always be grateful to him for it.

The financing solution may be right there, you just have to find it.

Be creative, this advice applies not only to finding money, but to business in general.

“Think out of the box,” as the Anglo-Saxons say.

Chapter 17

A bank is not a building

It's unlikely that any of you are seriously considering starting a bank. First of all, it requires a lot of money. Since 2012, the minimum capital for a credit institution in Russia has been 300 million rubles. This is the state-established minimum, but a successful business requires much more.

The entry threshold is high, and it's unlikely that you'll become a banker, but I'll still share my banking experience—it can be applied to other businesses.

Incidentally, I don't understand some bankers who think their business is any different from producing sausages or running a coffee shop. The essence of business is the same everywhere: buy cheap, improve, sell for a higher price. But banks have a unique product: money.

They borrow money at one rate and offer it to clients at a different, naturally higher, rate. They offer not only money but also service. In the case of my bank, Tinkoff Credit Systems, this means high-quality credit card service (tcsbank dot ru U.R.L).

How did I even come up with the idea to get involved in credit cards? The idea had been coming to me since the 1990s. When I lived in America, I saw how developed direct marketing for banking services was there—banks would bombard me with invitations to open a card by mail. I regularly responded, became a customer, and saw how the product worked.

the very hearth of capitalism.

I've always disliked Russian banks. We asked, "Give me a loan!" And they said, "Well,

There's a complete loser sitting in the bank. If you've ever applied for a loan, you know:

90 percent of the time, the person sitting on the other side of the table is a closed-minded individual. And, as a rule, they didn't give us loans, but they often gave them to people who later didn't pay them back. I thought, "Well, if they're such idiots, then we can and should compete with them."

Finally, I've always liked credit cards as a product. I think paying with a card is incredibly sexy. It's safer than carrying cash. It's more technologically advanced: if you need to take out a loan, you just sign up for the card once and can use it as many times as you want, unlike traditional lending, where you have to go to the bank again and sign new paperwork each time.

For a long time, my interest in the banking sector was theoretical, but when I sold my brewing business to InBev in mid-2005, I began taking a closer look at the credit card market. I paid hundreds of thousands of dollars to the Boston Consulting Group for a feasibility study—a study that determines whether a business idea has potential. The answer was yes.

I went around to some bankers I knew and talked to them about business. They, of course,

They talked me out of it because I had no banking experience, and the market was technological and complex.

This didn't stop me: every time I started a business, I heard

Similar things: "An electronics retailer can't make dumplings," "Beer is a business for transnational corporations." If you'd listened to them, neither Daria nor Tinkoff would exist, and you wouldn't be reading this book right now.

An entrepreneur shouldn't be stopped by other people's disbelief. The main thing is to believe myself.

On November 18, 2005, on Necker Island, I finally decided to become a banker, and my bank, Tinkoff Credit Systems, issued its first credit cards in mid-2007. Despite the crisis, the bank already turned a profit in 2009, earning $18 million net. In 2010, profit was half that, but only because we invested heavily in future growth. And in 2011, the bank will achieve record profits.

It's clear that the project has succeeded, and let those who didn't believe in it bite their elbows. It turned out to be very efficient: it doesn't have a single compartment for maintenance clients and no network of its own A.T.M's. The bank saves a lot of money on rent, repairs and office maintenance are our competitive advantage.

When starting a business, always remember: new technologies enable startups to outperform players using legacy infrastructure. After all, you have the opportunity to purchase the newest and most efficient equipment and utilize the most advanced sales channels, while your competitors are trapped by their previous steps and their old business model.

If traditional bank clients are accustomed to going to a branch, then the bank's transition to a branchless model will come as a shock. That's why banks are forced to continue Maintaining expensive infrastructure in the form of branches and ensuring that A.T.M's are always stocked with cash, even though half of our clients are already prepared to avoid going to branches altogether.

Our clients initially came to us knowing they would be served remotely. Many people aren't yet mentally prepared to work with a bank without branches. Well, we're not big enough to serve everyone.

We need to take a philosophical approach and focus on people who are ready for remote service. In our case, the target audience is it is they.

We pay other banks for our customers to use their A.T.M's. But this

It's still more profitable than buying, installing, and maintaining A.T.M's all over Russia ourselves.

I insisted that the client be able to repay the loan through any channel.

free.

"The use of innovative technologies, European service, and the thoughtfulness and clarity of all banking operations are the bank's operating principles. The bank has been committed to technology from the outset, allowing it to quickly create new products and modernize existing ones." These words from the bank's annual report are absolutely true.

Remote operation allows the bank to serve clients in all 83 Russian regions, Moreover, each region accounts for no more than 5 percent of the entire client base. This is good from a risk diversification perspective, as economic problems in one region will not affect the quality of the loan portfolio as a whole. Around 45 percent of Tinkoff Credit Systems bank clients live in small towns with populations of less than 100,000. Often, in these towns, Sberbank is the only bank available, and sometimes it's not even there. Our strategy, which I described above, is producing results. We've carved out a neesh as a player focused solely on credit services. cards. A small bank can't be universal. It simply doesn't have the money to support this versatility. But it's much easier to hone your craft if you only have one product. We can launch a new project in a matter of weeks, while large banks

It takes years for universal banks to do this.

Don't spread yourself too thin. Choose your core product and focus on one thing.

Thanks to our focus, our small bank has managed to become a leader in the credit card market, competing with much larger players such as Russian Standard, Sberbank, V.T.B.24, Citibank, O.T.P Bank, Alfa-Bank, and H.C.F Bank. Moreover, by early 2012, we will be second only to Russian Standard and two state-owned banks.

I already discussed in Chapter 16 how difficult it is to raise money in the debt market. In 2010, we started to succeed, and our loan portfolio grew by 90 percent to 10.1 billion rubles. Net profit before tax was 585.1 million rubles. Equity increased to 2 billion rubles, allowing the bank to achieve a capital adequacy ratio of 13.2 percent. Profitability

The ratio of assets and capital under R.A.S amounted to 1.85 percent and 12.17 percent, respectively.

For a remote bank to simply survive in a competitive market, the quality of its services must be higher. It must be at a European level.

strategic necessity.

We are constantly improving the quality of the products offered and the level service. The process of receiving the service should be simple for the client. Therefore Tinkoff Credit Systems Bank partners deliver offers for the Tinkoff Platinum credit card to the client's place of residence.

After you complete your Tinkoff Platinum credit card application on the bank's website, consultants will deliver the card to your place of work. The bank also uses outsourced direct sales capabilities (sales agents) or personal delivery through regular "refer-a-friend" promotions when customers receive cash bonuses from the bank if they refer their friends.

Application forms should be easy to complete. The client has the opportunity Track the status of your application via S.M.S messages and/or on the bank's website. Additionally, clients can receive all necessary clarification on offers, rates, and procedures by calling the 24/7 call center toll-free. 24/7 service is also highly appreciated. Clients appreciate it.

7 - for a bank this is a necessity, in other businesses speed and attention.

Under the retail deposit program, launched in March 2010, representatives

The bank delivers to the potential client all the necessary documents for concluding the agreement

Deposit agreements and special card account servicing agreements, as well as a personalized

MasterCard Platinum debit card, are usually issued within 24 hours of receiving the application. Potential clients can choose the most convenient appointment option on the website or through the call center. Where else can you get a free Platinum card the next day? Where can you get a card with a free service and the ability to withdraw cash without commission at any A.T.M world? Such a service is provided, for example, by the Citigold package, but it costs 2800 rubles year.

Let me point out that we don't issue these cards to everyone; they are only issued to people who make a deposit of at least 30 thousand rubles.

Obviously, it was a great idea. Lots of banks issue debit cards. But not so fast. Not so cheap. Not so prestigious. Not so convenient. Our black card was, of course, pure marketing.

Surprise the market, and it will thank you. We started receiving deposits so quickly that we soon had to stop all advertising.

By the way, almost all cards issued by the bank are platinum. I'm often asked, "What kind of platinum card do you have if the limit isn't 500,000 rubles and there are no extra services like concierge service or free insurance for everything?" My answer: our platinum cards are issued according to MasterCard standards and are eligible for all the payment system's benefits (mastercardpremium dot ru). Yes, the bank doesn't offer any additional benefits, but the service fee is very reasonable—just 590 rubles per year, which is less than banks typically charge even for a MasterCard Mass or Visa Classic card.

Of course, Platinum is pure marketing. To put it bluntly, it's just a show-off. Some people, especially abroad, enjoy paying with a Platinum card; they also have a Gold card.

It's rare, and no one has ever seen a Platinum card. What really matters is whether there's money on the card or not and are there any glitches? When you come to a store or a restaurant, and you can't get through payment - even if it's a diamond card, your mood will drop to zero. And what are you

Are you thinking about a bank? A premium name should be backed by a corresponding service.

Always make your product as convenient as possible for the customer. For example, we carry additional costs, but the client always knows that he will not pay a commission when repaying the loan through the network of our partners: Russian Post, Elexnet, Qiwi, Contact, etcetera Few banks are willing to provide such a benefit to clients. In this way we gain another competitive advantage.

Make it as easy as possible for your customers to part with their money.

Queues. On the one hand, they indicate high demand for your services. On the other hand, in Russia, they're usually a sign of poor management.

It's one thing to have a line for the iPhone 5 on launch day—that's only a plus for the brand. Apple will never confirm this, but I'm sure the company is deliberately creating hype before the launch of a new product so that it gets written and talked about more often. A line at the bank to perform the simplest transaction is another matter entirely—that's customer abuse. A customer standing in line for half an hour is almost

A lost client. Why almost? He won't leave immediately due to lack of time, but he will do so as soon as the opportunity presents itself. He'll go to a competitor who values his time.

This applies to both banks and restaurants. (Have you ever had to wait an hour for lunch?

How many times have you visited this restaurant again?) And to the mobile operators, yes to whom whatever you like. In the age of modern technology, the client expects to be served to the maximum quickly. It's a commonplace rule that "time is money." Whoever saves the client's time will earn money.

This is especially important now, in your business, when people have access to new technologies. So don't be shy about making promises. In the West, a promise to keep Something for free if the deadlines are not met is a common thing. For now, we have this

It's rare. We usually give orders for free if a receipt isn't printed—to prevent staff from stealing. Russian entrepreneurs are reluctant to pay for late delivery, which is a shame—it's a very good argument for customers. For example,

Syktyvkar entrepreneur Fyodor Ovchinnikov promises a free pizza to every customer if they don't receive delivery within an hour of calling. Such promises work: customers want a guarantee of speed.

Promise 20-minute service at your cafe or flower delivery within an hour.

Of course, unless you live in Moscow, where traffic jams are completely unpredictable.

It's easier for us at the bank. Lines are impossible, even theoretically, since we don't have branches. The bank handles all customer service issues through a call center, online banking, and email.

If you don't have offices, two things are crucial: your call center and your website.

I'll go into more detail about them. The call center began to be called "contact"

"Center" because, in addition to phone calls, we handle inquiries through other channels as well. For example, we receive several thousand emails a day at service@tcsbank.ru—and they are all promptly addressed. Have you seen anything similar at other banks? We also develop public communication with clients online—on blogs and social media forums.

The contact center is the face of the bank. The friendlier the face, the more loyal the customers and the higher the profits.

What does a contact center do in a bank? Here's a little banking education. Contact

The center activates credit and debit cards in real time, processes deposit applications, provides clients with account status information, advises on credit and deposit products, and activates and deactivates additional services. The bank receives 50,000 incoming calls and approximately 60,000 outgoing calls daily, with a significant portion of these calls processed by automated systems.

The bank grew aggressively in 2010 to 2011, so we installed an additional 400 workstations equipped with Avaya Elite hardware and software and the Nice Perform call recording system. As part of this project, we implemented the Avaya Voice Portal voice self-service system, which handles over 10,000 calls per day, and the Scala information monitoring system, which allows anyone to contact center employees can see their performance indicators in real time.

The higher the percentage of automated communication, the better for both the client and the bank. Clients can resolve their issues without the notorious human factor, and the bank saves money. Tinkoff Credit Systems has implemented automated card activation by phone and intelligent automatic call routing.

Taking into account data from the C.R.M system, I increased the speed of the systems and reduced the time. Call processing while an employee is working with C.R.M forms. This allowed us to save resources and improve service quality.

Technological support is crucial, especially as your business grows. Therefore, make sure you purchase high-quality and scalable software.

In 2010, the bank consistently held a leading position in service quality, according to reviews from real clients, according to the independent portal banki.ru.

According to a survey of customers who have been using the service for more than 3 months, approximately 95 percent of customers are satisfied with the quality of service.

The website is the second face of the bank. In mid-2011, we implemented a portal from the Dutch company BackBase. When visiting the website, clients should understand what's going on and where is located. This is a basic requirement for any website.

The website sells services, the path to purchase should be as short and intuitive as possible.

There should be as few stages as possible—at each one, the funnel narrows, and some customers leave the site. Increasing conversion is your goal. Even the most

Offline businesses must now have a clear website. It's a must, as they say. Those who neglect the internet will soon simply leave the market.

I'm certainly pleased to be in the credit card market. Penetration

Credit cards account for only 10 percent of the Russian market. While there are four cards per American, in Russia the figure is 0.1. The growth potential is enormous!

A growing market is half the battle. It's harder to grow in a stagnant market, and even harder to operate in a declining one. Choose an underdeveloped segment with potential for significant growth, although it can be difficult to spot. But that's what entrepreneurial spirit is all about.

Chapter 18

How an entrepreneur can develop himself

Not only an entrepreneur, but any other person should know how to develop themselves. That's why they are human, not an animal. That's why we go to school as children, read books, go to the theater, watch movies, read newspapers, and visit internet portals. A person must develop to avoid turning into a monkey. Probably, before

For an entrepreneur, this task is especially acute, because he who owns information controls the world.

It's crucial to read the news early in the morning—I was taught this during my time at Berkeley, where I studied marketing during the Daria era. You need to subscribe to all the business newspapers and magazines. I, for example, at least skim all the business publications, often completely worthless ones. An entrepreneur should visit five or six major news sites in the morning, and preferably read the newspapers in the evening (they're published at 12:00) or in the morning, over a cup of coffee—for those accustomed to the tactile sensation of reading. News is simply a must. It's the bare minimum.

I'm often touched by people, decent entrepreneurs, who you meet and ask, "Have you read about the Yandex I.P.O scandal?" And they say, "No," the same evening. For me, that entrepreneur ceases to exist in the absolute sense. If someone of that stature hasn't learned about major Russian entrepreneurial news by noon, they're at the very least very strange. Unless, of course, their mother died this morning.

Also books. Of course, businessmen have little time, so strict filtering is necessary. I approach it this way: I read 60 percent fiction and 40 percent business literature. Because it's really hard to read only about business when it already takes up 70 percent of my personal information space. And for a person

It is important to develop comprehensively and be advanced.

I read four or five books a year, two of which are business books and three are artistic. From the latest business I read about how the company was created

"Ozon." Among fiction books, I read Oscar Wilde's "The Picture of Dorian Gray." In May 2011, I read Edward

Radzinsky's "Ivan the Terrible."

I was once asked on my blog to name my 10 favorite fiction books and 10 favorite business books. The lists turned out like this.

Fiction books

1. Alexandre Dumas. "The Three Musketeers".

2. Victor Pelevin. "The Dialectics of the Transitional Period from Nowhere to Nowhere."

3. Fyodor doh-stoy-ev-ski. "Crime and Punishment".

4. Victor Erofeev. "Russian Beauty".

5. Mikhail Bulgakov. "The Master and Margarita".

6. Vladimir Sorokin, "Day of the Oprichnik".

7. Victor Pelevin. "Generation P".

8. Anton Chekhov. "The Man in a Case" and others.

9. Nikolai Gogol. "The Overcoat" and others.

10. Honore de Balzac. "Shagreen Skin".

Business books

1. "Chinese stratagems".

2. Sun Tzu. "The Art of War".

3. Philip Kotler. "Fundamentals of Marketing".

4. Sam Walton. "Made in America."

5. Napoleon Hill. "Think and Grow Rich."

6. Akio Morita. "Sony. Made in Japan."

7. Richard Branson. "Losing My Virginity" and "Naked Business".

8. Robert Kiyosaki. "Rich Dad, Poor Dad."

9. Jason Fried and David Heinemeier Hansson. "Rework: Business Without Prejudice."

10. Mark Twain. "The Adventures of Tom Sawyer and Huckleberry Finn"

To be honest, I haven't read “Chinese Stratagems”, but since it's my favorite book Director of Risk at Tinkoff Credit Systems Bank, Evgeny Ivashkevich, I decided to put her first.

I guarantee that by reading any of these books, you will not waste your time and will gain a lot of valuable information for yourself as an individual and an entrepreneur.

I love movies. You can't be savvy if you only watch business movies like "The Social Network" or "Wall Street." Those are important and necessary films, but you should also know who Lars von Trier is. Or, for a general understanding of the market, watch a film by a nerdy, obtuse director like "Fast and Furious." You should have a more or less general understanding of all of this.

What movies do I like? "The People versus Larry Flynt" and "One Flew Over the Nest" Miloš Forman's "The Cuckoo," Orson Welles's "Citizen Kane," Francis Ford Coppola's "The Godfather," Lars von Trier's "Dogville," Roman Polanski's "Bitter Moon," and Stanley Kubrick's "A Clockwork Orange." Among Russian films, Vasily Shukshin's "Kalina Krasnaya," Mikhail Kalatozov's "The Cranes Are Flying," Pavel Lungin's "Taxi Blues," and Kirill Serebrennikov's "The Island." In general, I love the strange films presented at the Cannes Film Festival.

I try to go to the theatre two or three times a year and at least once every three years to ballet or opera, which are more complex and still incomprehensible forms of art for me.

Let me remind you, I'm from the Siberian hinterland. It's a bit tough for me, but I'm trying to get into it. I rarely go to classical music concerts. But for some reason, I've come to love going to operas during the Puccini festival in Italy. It's held in the summer, on a lake.

Massaciuccoli, in the small town of Torre del Lago, located near Viareggio. All the famous Puccini operas are performed there, and my family and I try to go once a year.

a year to walk.

Sports are important. Remember Chekhov: everything about a person should be beautiful? Entrepreneur I have to keep myself in good physical shape. Heavy workloads, working in the office for at least eight hours. No matter what anyone tells me, I worked in a mine, that's It's hard, but eight hours in the office is hard too. Especially since you have to constantly Think. As a rule, entrepreneurs work 10 to 12 hours, while extreme sports enthusiasts work 14.

You need to do sports to clear your brain!

Alpine skiing, freeriding. I'm against far-fetched, extreme hobbies without the proper professional training. This usually ends in failure.

It's deplorable. And there are many such negative cases, unfortunately, with our Entrepreneurs and top managers who, after earning their first money, started, for example, buying expensive sports cars and racing around. And they're very difficult to drive. Or jumping with a parachute. It's understandable that they want an adrenaline rush. But it's also a good idea to think about safety.

Working with total dedication is wrong. For example, when I spoke with Pavel Durov, the founder of VKontakte, I noticed that he works from morning until night. He practically sleeps in the office. His apartment is in the building next to his office.

He works for weeks, even months. This is probably acceptable at this stage of the company's development, considering he's 26 years old. But overall, it's likely to lead to nothing good.

You can become blinkered, have a narrow view of things. You can't see anything from your office; you need to travel and interact with people.

I believe there is an optimal schedule. First, you get drawn into the work. Then comes the stage when you are most effective in terms of applying your Effort, results, and product output.

Then comes the decline: you can't work 20 hours a day, seven days a week—that's impossible. Or a whole month without a single day off—that's stupid. There has to be balance.

Try to do what you enjoy and understand. If attending mixed martial arts isn't your thing, or you're against blood and violence, don't force yourself to go.

Choose what you like. If you like dancing, go to a disco.

Have a drink - please. For example, I like to sit and drink wine with friends on Fridays and

Saturdays. It's a normal stress reliever. Go on a vacation with your family,

What could be better than spending time with your children? Live a normal life!

Don't forget that sex is very important. It's a stimulating and motivating factor for any entrepreneur. I don't know about you, but if I watch a movie, a ballet, or read a book, I'm trying to take something from them and project it onto the current reality, apply these things to business.

I heard that California's richest man, Larry Ellison, has a large zoo at home—a kind of wild animal safari on his ranch. He observes animal behavior and tries to apply these methods to business. I think there's something to this, especially when I see Oracle's success. Having gone on an African safari with my children, I really saw some funny things about the interactions between animals. These could be interestingly interpreted or applied in a business setting.

You need to learn from everything. The Internet has become a great help in this regard, but unfortunately, it also complicates it: how do you choose what's valuable in terabytes of information? Search engines are no longer always help.

What was it 20 years ago? The library or travel? Now, thanks to online opportunities and the development of the print industry, there are so many tools. Don't miss anything; analyze everything you see.

Combine business with pleasure. Even when I'm traveling with my family, I always look at how business is done—in restaurants, hotels, airports, stores all over the world. And I think about how this can be applied. You need to relax, but not slack off!

Chapter 19 Personal brand

Every entrepreneur is an individual with their own strengths, weaknesses, and quirks. And the entrepreneur's personality, the business owner's personality, is of interest to both clients and partners. "Who owns this?" is a question clients inevitably ask. And if they don't get an answer, they may feel uncomfortable and develop a subconscious distrust of the business.

However, if you are a former bandit, then the knowledge of this fact will create even more

Inconvenience for the client. But the problem is that in Russia, it's not just gangsters who prefer to hide, but ordinary businessmen too. They ask: why show up? They think people will envy you, extort you, beg you...

But why do they think that if you're unknown to the public, people in gray won't come to you and demand money or your business?

Firstly, these horror stories are from the 1990s. Nowadays, if an entrepreneur is genuinely not breaking the law, no one will come to them and extort money. Secondly, in my opinion, a publicly known entrepreneur is actually better protected, because people are afraid to approach them with bad intentions, fearing publicity.

My opinion is this: if you work in the consumer goods or services sector, you shouldn't hide. But I'll immediately mention some successful exceptions. For example, the Albrecht brothers in Germany, owners of Aldi, the largest chain in Europe by number of stores. Exceptionally little is known about their private lives; no one has even seen a proper photograph of them. But at least people know who owns the business.

Andrey Rogachev, founder of a similar chain in Russia, a grocery discounter

Pyaterochka essentially copied Aldi's idea. And the word "copied" in this case has a positive connotation.

Copying isn't enough; you have to be able to implement, adapt, and implement it in another country.

That's commendable. But I think it's also trying to copy the Albrecht brothers' behavior: not being photographed, avoiding publicity—I think that's wrong.

There's no need to go to the other extreme: giving interviews from morning until night, as some entrepreneurs do. Essentially, you'd be a clown. More extravagant behavior occurs, such as when businessmen name their children after brands.

Why do so many entrepreneurs avoid publicity? Everyone is different: some like it, others don't. It's a matter of psychology, of inner values.

Sometimes people crave publicity, but it's just not their thing. They try every which way to show off—it's simply ridiculous to watch. This behavior is especially characteristic of certain women. They want to write a column here and there, and give interviews everywhere, but it just doesn't work out: the public finds them of little interest anyway.

And then there are people like me—I run away from journalists, but they still write about me. I genuinely don't want to be in the public eye; it's just a matter of history, of poverty. Necessity is the mother of invention. I had to give interviews for PR. What is marketing? It's advertising plus PR. PR is essentially free, while advertising costs money. Those who don't have money for advertising rely on PR to ensure at least some promotion. In my case—with both pelmeni and beer—I simply didn't have enough money for promotion. I'll tell you.

Honestly, hand on heart: if I had more money, I would act like Roman Abramovich would not give interviews at all.

But, whatever you say, publicity helps. People know you, they know your company—one way or another, it boosts sales. Don't be afraid, talk to the press, communicate, meet.

Just don't call the newspaper and say, "Write an article about me." Conversely, you shouldn't agree to every interview you can get; you need to be discreet, selective, and manage the frequency of your public appearances. An entrepreneur's job is to

Have a keen sense of when and how much to be public, so as not to descend into clowning. If you want to remain interesting, try to develop a publicity strategy.

Find a happy medium. You don't have to be mega-famous; you're not Philip Kirkorov.

But at the same time, there is no point in hiding.

At this point, I'd like to discuss Roman Abramovich's media strategy, which I find clever, cunning, and unique. I'm sure he enjoys being the center of attention, enjoying being talked about and written about; otherwise, he wouldn't have bought Chelsea and those huge yachts. But he's achieved this through sheer cunning.

He doesn't give interviews, maintains his privacy, and pretends to remain unnoticed. This heightens public interest in him. A Yandex search for "Abramovich" will return 10 times more hits than for the super-public, book-writing Tinkov.

What are the benefits of publicity for a businessman? Recognition in your hometown.

A traffic cop might let you go after reading your name on your documents. The mayor will treat you better. The tax police won't harass you as much. These are the pros. But every medal has its downside.

There are cons, too. You'll be the first to get a nasty piece of writing in the local newspaper. Or in the national one—depending on your level. You'll be the first to be spat on and mentioned in vain when it's time to remember the "fat cats" who oppress the people.

But such is fate. An entrepreneur must be prepared for attacks, he must be able to protect yourself.

The simplest rule when working with a personal brand is to be yourself. I don't believe in artificially creating a beautiful story around a brand. I'm sure you

Have you ever heard something like this: “That's it, I'm getting married this year! I give you my word!” Stupid Statement. No one gets married on a schedule, and no one creates a success story around their brand or their name. Such things can't be invented: they either exist or they don't.

The same goes for the phrase "working on your image." Image is a reflection of you. You are who you are. You need to relax and enjoy it. All these stories about brands are just PR stunts, or, more accurately, scams. I don't believe it. The hype will wear off, and people will think of you for who you really are.

Where image-maintaining techniques can really be used is in crisis PR for large corporations. For example, the B.P oil spill in the Gulf of Mexico. Of course, PR does its job here. It suppresses press articles, explains the company's position, etcetera But at our level, hiring advertising agencies agencies and building some kind of myths, inventing stories around your brand is complete stupidity.

I am sometimes touched by people who write about how I hired agencies to promote yourself on the Internet - LiveJournal, Twitter, etcetera Complete nonsense. When you start doing such things, it's immediately obvious. The unnaturalness, the artificiality, is immediately obvious, secondary. It just doesn't work.

If you're a budding entrepreneur, you don't need hired PR people or, heaven forbid, agencies. Think about what you want to convey to the public and how best to do it. Communicate directly with journalists, be active online, attend events, and come up with something that will be interesting to others and something that will get people talking.

You can't force people to be interested in you and your product, but you can engage them emotionally: by providing interesting information and showing them that your values align with theirs. This is how a brand is formed. Remember, a brand isn't just a name and a logo's color scheme, but also the thoughts that come to mind when people encounter it.

In the next chapter, you will learn which brands I personally consider great and why.

Chapter 20

About great entrepreneurs and great companies

I'll tell you about entrepreneurs who created brands I admire. And judging by their success, it's not just me who admires them, but millions of customers as well. Every successful business can serve as an inexhaustible source of ideas for you, even if you plan to work in a completely different field. Don't be afraid to borrow ideas—it's not stealing. There are plenty of ideas floating around, but only a few are successfully implemented.

All kinds of companies are necessary, all kinds of companies are important. As a lifelong entrepreneur, I love entrepreneurial companies built by one or a few strong owners. Companies that grow not through corporate efforts, but thanks to one or two individuals. Therefore, there aren't many companies in the world that excite and fascinate me. Clearly, one of them is Apple, led by the great Steve Jobs.

Do you know his story? In the late 1970s, he, along with Steve Wozniak and Mike Markula, founded the personal computer industry, which became popular. In 1984, Apple launched the Macintosh computer, but by 1985, shareholders had kicked him out of the company.

Apple eventually sank to the brink of bankruptcy, and the shareholders took him back. Then he launched the iPod, iTunes, iPhone, iPad, expanded his line of computers, and what do we see? Today, Apple is the most valuable company in the world, more valuable than Microsoft. In 201, Apple's market capitalization (the value of all outstanding shares at the stock exchange price) exceeded 30 billion dollars. The company has been growing at a truly incredible pace in recent years. In the second quarter of 201, revenue was 24.7 billion dollars, and net profit was 6 billion dollars.

Both figures are approximately twice as high as for the same period in 2010. Think about these numbers!

It was the company's founder who, upon returning, was able to raise it from its knees and make it a leader. technological revolution. What does this mean? The entrepreneur knows his brainchild inside out.

He built this mechanism. As a rule, only he (and no one else) can manage it. Or understands better than anyone how to do it.

No matter how brilliant the collective thinking may be, the person who came up with it,

The one who built the company always knows best how to manage it. What happened to

Apple only confirms this theory. A great company, a great entrepreneur, who clearly feels the needs of the consumer, loves him, respects his views, tries to do something better for his consumer and, of course, for his

Virgin. A specific person, Richard Branson, does everything to ensure that his brand, his company developed to its full potential and yielded results. This included dividends for him and his shareholders, as well as added value for consumers.

Back in the 1970s, Richard laid the foundations for a brand so strong that it can operate across all consumer industries. Examples like this are few and far between, but they're true. Virgin Atlantic airline, Virgin Trains, Virgin Galactic space tourism, Virgin Money financial services, Virgin Mobile mobile communications, Virgin Books publishing, Virgin Games, and so on.

Richard has different partners in his businesses, so he removes financial risks from himself by focusing on developing a brand whose values are freedom, entrepreneurship, rebellion and fun.

Under this model, individual businesses may fail, but this doesn't affect consumer attitudes toward the Virgin brand as a whole. For example, Virgin Cola, which Richard Branson launched in 1994 by crushing Coca-Cola with a tank in Time Square, initially sold very well, but then failed to withstand the pressure from its leaders. Another example of a failed business is the wedding services company Virgin Brides, also launched with a flamboyant stance: Richard dressed in a bride's dress and even shaved off his famous beard.

Starbucks. I'm literally fascinated by the technology and corporate culture of this company, which has over 17,000 cafes in 50 countries. I've visited Starbucks around the world because they brew my favorite coffee. The uniformity of standards is striking. Teaching people with different religions, mentalities, and cultures to serve coffee to their customers equally quickly, efficiently, and with a smile is very difficult. Howard Schultz is a great entrepreneur.

Starbucks was founded in 1971 without him. He bought it in 1987 and grew it into the largest coffee shop chain, with $10.7 billion in sales and $1.4 billion in profits. He renamed his then-II Giornale chain Starbucks, believing it would be a better fit for the American market. He was right.

I am very impressed with the company Dassault, a French aircraft manufacturer. You've probably heard of the Mirage model. It's a privately owned French company. For many years, it's still owned by the Dassault family. Interestingly, Dassault isn't a real company. The founder's surname.

His birth name was Marcel Bloch, and the company, founded in 1930, was called Société des Avions Marcel Bloch. In 1936, the company was nationalized, and during the war, the Germans sent Marcel Bloch to Buchenwald for refusing to work for the German aviation industry. After the war, he changed his surname (and the name of the company) to Dassault, in honor of the war nickname of his brother, who was in the French Resistance. Marcel Dassault died in 1986 at the age of 94, and the company is now headed by his descendants, Serge and Claude Dassault.

They prove that family businesses can exist even in the military sector, which is considered state-owned. Nevertheless, Serge and Claude Dassault are building some of the best Mirage fighter jets, surpassing their counterparts in technical specifications. Over the past decades, Dassault's sales have only grown.

They clearly segmented the market, understanding that military procurement is cyclical; they began to engage in business aviation, thereby eliminating this cyclicality. Dassault created the Falcon brand: a standard of quality, a distinct philosophy, a different level. Although most of our oligarchs fly primarily on Gulfstreams, and in terms of sales volume in the private jet market, they are the world's largest

While Bombardier dominates the aircraft market, the Falcon always remains more than just an airplane. It's no wonder the Russian presidential administration purchased two Falcons for the president and prime minister. A truly unique, special brand.

And this is the reason why Falcon did not fall during the crisis, although all competitors in the business jet market fell – Cessna, Hawker, Bombardier, and Gulfstream.

Any Italian boutique brand – Versace, Dolce & Gabbana, Prada, Brunello Cucinelli, etcetera, is the embodiment of entrepreneurial genius, successful branding, absolute beauty and sexiness. How lucky can you be to have such a brand! Not only do you earn money, but you also get great aesthetic pleasure, seeing the sparkling eyes and joy of customers buying yours products all over the world.

I felt this to a very small extent at the Tinkoff restaurant on Kazanskaya Street, 7, in St. Petersburg, when he opened the first restaurant in the country with unfiltered, unpasteurized beer. People sat and drank beer. It was cool and sexy. And I made good money from it. The absolute joy of an entrepreneur is when you have a profitable product, consumers love it, and it brings them added value.

cost and joy. In this sense, any of the Italian ones I listed luxury brands are the absolute embodiment of entrepreneurial happiness.

I'd be unfair if I ignored Google. I'm not a Bloomberg analyst, I haven't done any research or calculations, so I could be wrong. But in my opinion, it's the most the most profitable business ever invented by mankind. Except The oldest profession—selling one's own body. They're simply going crazy—they have so much money. In 2010, Google's net profit was $8.5 billion on revenue of $29.3 billion.

Over the past three years, net profit has been almost $20 billion. Google is buying almost one company a day. They bought an office building in New York for two billion dollars. Google is buying everything, investing in everything, hiring the most expensive people, raising salaries. This is probably a rational position. A company with a lot of cash always has a smaller market capitalization, because it doesn't know what to do with it. As of this writing, Google is worth $170 billion. dollars, and at its maximum it was estimated at 220 billion.

Americans have such problems, we wish we had those! Their model, devised by Larry Page and Sergey Brin, is absolutely brilliant in terms of per-word pricing based on contextual advertising. People come up with their own words and set a price for them.

And then other people click on those words, for which Google gets paid. What a fabulous model! Google is trading pixels on the screen, essentially - air.

Google gets a lot more from one visitor than Yahoo! or Facebook. On the other hand, it is a great business that brings benefits to people and added value. Consumers use it constantly and happily. Google, for example, is a great advertising tool for small businesses—sole proprietors, startups, cafes, and bars.

On the other hand, the company generates enormous profits for shareholders. It's a global, beautiful brand, a super-profitable business. Incidentally, the word Google comes from "googol"—a number consisting of one followed by 100 zeros. Perhaps this metaphysics is now helping the company earn large sums of money with many zeros.

In Russia, entrepreneurship is 100 years younger. Therefore, our successes are much more modest. Nevertheless, there are great brands, in my opinion, even on a global scale. Such as Yandex or Kaspersky.

There are few countries left in the world where Google isn't already the top search engine. In Russia, Yandex has been very effective in defending its top spot from Google's advances.

At its I.P.O (initial public offering) in May 2011, the company was valued at $7 billion; 36.7 million shares were sold by Yandex's co-owners, and 15.4 million shares belong to the company itself. In total, investors paid $1.1 billion, receiving 16.2 percent of the shares.

Yandex's example illustrates how highly a business can be valued while generating relatively little revenue. Yandex's revenue in 2010 was $439.7 million, with net profit at $134 million. That is, investors valued Yandex at 15 times its revenue and 50 times its net profit. A respectable result for entrepreneurs Arkady Volozh and Ilya Segalovich, who had been developing the business for so many years.

Mail.Ru Group held an I.P.O on the London Stock Exchange before Yandex. In November 2010, 16.8 percent of the company's shares were sold at the high end of the range, valuing the business at $5.71 billion.

And here we must credit the energy and foresight of a man like Yuri Milner. We

I met Yuri by chance in Italy 10 years ago. He was telling me something about the internet, and I didn't even pay attention. And 10 years later, he's been recognized as the best internet investor not in

Russia, but in the world! A phenomenal result, and my respect goes to him and his partners, Mikhail

Vinchel and Grigory Finger.

Mail.Ru Group is now the second largest shareholder after Mark Zuckerberg Facebook has stakes in Groupon and Zynga. This is in the West, but in Russia, the group owns half the internet: the largest email portal Mail.ru, the social network Odnoklassniki, a minority stake in VKontakte, I.C.Q, and so on.

We should be proud that Yandex and Mail.Ru Group are companies with Russian roots, occupy the top two positions among the most valuable Internet companies in Europe.

There's an interesting entrepreneur named Andrey Andreev. In the 2000s, he founded the dating service mamba.ru, the contextual advertising service Begun, and the analytics service SpyLog company. In 2005, Andrey Andreev sold Mamba for 20 million He donated dollars to the investment holding company Finam, and went to London to build a world-class startup. And he succeeded: he built the social dating network Badoo, which is growing at a tremendous pace, conquering countries like France, Spain, and Brazil.

I like the business built by Eugene Kaspersky, my neighbor in the office on 1st Volokolamsky Proezd in Moscow. He's built a truly global brand, Kaspersky Lab, in the internet security market, and despite piracy, sales of antivirus software are growing 30 to 40 percent each year. In 2010, the company's revenue was $538 million. Sales are evenly distributed worldwide.

which makes the model more stable.

Now I'll move to offline. Sergey Galitsky from Magnit started out in wholesale, not retail. He sold household chemicals. In 1998, he opened his first grocery store in Krasnodar, and realized that this could be a good business.

As a result, Magnit became the leader, market in terms of number of stores and coverage area. In Russia, it operates 64 branches, more than 4,000 convenience stores. In 2010 to 2011, the Magnit chain Opens 800 stores a year, employing more than 120,000 people. Sergey brings life and civilization to the regions, to the wilderness. He brings competition, an understanding of business, commerce, and capitalism.

Magnit has also become a leader in the field of private labels – brands owned by retailers. Networks. More than 600 products are already produced under his private label.

Pyaterochka, founded by Andrey Rogachev, also operates as a discounter, but it's less prominent in Russia's regions. Pyaterochka has about 1,500 stores, and its average revenue is significantly higher than Magnit's.

Overall, X.5 Retail Group is still ahead of Magnit in terms of revenue, as it includes Several chains. In addition to Pyaterochka, there are 303 Perekrestok supermarkets, 71 Karusel hypermarkets, and 650 Kopeyka stores. In 2010, X.5 Retail Group's revenue was 1.3 billion dollars, with a net profit of 271 million dollars. Magnit's revenue was 7.8 billion dollars, with a profit of 34 million dollars. As you can see, Magnit is more profitable. Sergey Galitsky has proven to be a very strong competitor for Mikhail Fridman, head of Alfa Group, X.5's main shareholder.

In the coming years, we'll see a battle between these giants, and consumers always benefit from competition. Neither wants to give in: in the first quarter of 2011, Magnit's revenue grew by 53 percent compared to the first quarter of 2010, while X.5's grew by 48 percent.

For now, investors have more faith in Magnit: in 2010, it overtook X.5 in market capitalization and was valued at $12 billion in May 2011.

In Russia, there are brands that bring consumers not only a product or service, but also positive emotions and added value, such as Splat toothpastes or Azbuka Vkusa stores.

There are large companies like Procter & Gamble, Unilever, McDonald's, InBev, and Baltika. They have many strong, well-selling brands in their portfolios. They're all constantly featured on our television screens: Lipton, Calve, Knorr, Ariel, Fairy, Head & Shoulders, and so on. Despite my generally positive attitude toward these brands and companies, they're still commodity products, mass-market products. They're barely distinguishable from one another, and I personally try not to use them.

I hardly consume them. Except maybe Gillette—it's a complete monopoly, and there's no escape.

I love brands from private entrepreneurs, small companies, independent Manufacturers. This isn't typical for us yet, but it's already happening in Russia. And the Russian consumer will soon understand that they need to support local businesses, and it's better to support a small, up-and-coming brand with their rubles. Our population doesn't yet feel like their vote matters, both in terms of political voting and in the consumer market.

It is your ruble, your vote that decides!

Resist the urge to buy from huge companies—don't buy their products. Instead, support small, emerging brands, like I do. I buy brands that may be owned by large companies, but are created and promoted by entrepreneurs.

Because they drive progress, the world, the universe. They change our lives. Regardless of the material benefits, incentives, and motives that may underlie this.

Being an entrepreneur is cool, it's a great mission.

And I want you to become an entrepreneur after reading this book. I want you to quit your job, change your mindset, and start inventing, creating, and sharing added value with consumers. I want you to make our lives better, happier, and more beautiful.

Entrepreneurs will win all over the world and even in our country, where the attitude towards them ambiguous.

Chapter 21

Russia and Entrepreneurship

Richard Branson once said to me, "Oleg, be careful there in Russia!" I said, "Why?" And he said, "All your entrepreneurs are in jail. In London, whenever they show Russian entrepreneur on T.V, they're always behind bars."

Entrepreneurs are treated poorly in the country, both by the government and by the general public. Moreover, the people couldn't care less whether you're Roman Abramovich, Oleg Tinkov, or Uncle Vazgen, running a market stall "in the neighborhood." Being a businessman means profiting from the common people.

People are outraged: bastards, they stole everything, we had everything, and now we have nothing. And what did they have? I remember myself in the 1980s – there was nothing. No material wealth, no freedom.

This attitude has cultural, social, and religious roots. And I wouldn't blame the government for this attitude, because it reflects society.

I myself have a terrible attitude towards the oligarchs. They have completely plundered the country, that's a fact. But You can't put everyone under the same brush: some oligarchs were also creators. And there are entrepreneurs who didn't participate in privatization at all, but themselves achieved this with their sweat, blood, and labor from morning until evening.

And there are those who are parasitizing on what was built in Soviet times; they are simply pumping out resources, and then let the grass grow. I sometimes see them at crazy events somewhere in Nice or Italy, when a party can cost 3 million euros. The money for this is earned in Russia, and the people here are in poverty.

You don't have to go far – it's Norilsk Nickel. I was in Norilsk – it was simply shocking.

People are zombies, everyone's dirty, the earth is scorched. And Potanin, on his private jet, talks on N.T.V about how to live and how he runs his business properly. Clean up your Norilsk first! Norilsk Nickel has

5 billion in net profits a year! Think about that! And the city is in such a state. Then we wonder why entrepreneurs aren't liked.

Why is entrepreneurship in Russia where it is? Some argue that it's largely because the country is Orthodox. And supposedly, our faith hinders Russians from doing business. This is probably only partly true.

They tried to compare Orthodox and Catholic countries with Protestant ones—such as the United States, Great Britain, and Switzerland. In Protestant countries, there's no pressure from faith or religion, which facilitates business development. Making money there is good. But from the perspective of Orthodox and Catholicism, it's not a very correct or pious activity.

But we don't see any pressure from our church on this issue. On the contrary, the church constantly rewards entrepreneurs for making donations. Perhaps in the 18th

In the 19th centuries there was some pressure, but now the Orthodox Church's attitude towards business is tolerant.

I'm Orthodox, but I'm in business. I was baptized at 20, in St. Nicholas Church in St. Petersburg. Since I travel a lot, I'm drawn to St. Nicholas the Wonderworker, the patron saint of travelers. You could say he's my saint. I've even been to Bari, where his relics are buried.

However, the facts speak for themselves: in Protestant countries, as well as in the Jewish religion, where the cult is the golden calf, people are more organized, enterprising and financially successful. The environment for entrepreneurs there is more favorable, it must be admitted.

But it's also impossible to say that there's pressure in Russia even remotely comparable to what's happening in the East. Even loans there are disguised as if they weren't loans.

Our shared goal is to change attitudes toward entrepreneurship in Russia, to make them at least a little more positive. So that people understand: The entrepreneur creates jobs and competition in the market.

If there are new jobs, it means that competition in the labor market is increasing, Salaries will rise. And if there's a new product or service, then competition also increases. As a result, goods can be bought cheaper.

That's the benefit of entrepreneurship for society. And if no one does anything, then no one earns. Everyone sits in ass.

I've been actively promoting entrepreneurship in our country for several years now. Oleg Anisimov and I have been hosting the show "Business Secrets" since October 2009, completely free of charge. It's a lot of personal time, but it's important to me. Russia deserves more. I have three children, and I want them to at least try to stay here. I don't see much chance, of course. But I'm doing something about it.

Look at how entrepreneurs are treated in normal society. They made a movie about Mark Zuckerberg and made him a hero. "The Social Network" won several Oscars. The film contains contradictions, including Zuckerberg himself, who appears ambivalent, but it's clear to everyone that such enterprising people move the world forward.

Look at how society lives in the film, how students live at the university: everything focused on business, all about business. They want to get rich, create, and become entrepreneurs, To make money. The film and its accompanying music by Trent Reznor and Atticus Ross are a kind of hymn to entrepreneurship. In our country, the entrepreneur is a "thief" and a "bastard." It's a shame.

And when I get one or two emails a day saying, "We watched your show and started making it," it's very gratifying. That, if you will, is my social mission. My philanthropic project.

I want entrepreneurship in our country to be Elevated to the level of a cult. So that entrepreneurs are seen as normal people. And not just through bars on T.V. So that there are fewer entrepreneurial clowns. And more people who take risks, move society forward, improve life, make it brighter, more beautiful, richer, more interesting, more worthy.

I will quote here one of the last letters at the time of submitting the book; I received it on June 13, 2011.

"Hello, Oleg.

In this letter I want to express my gratitude to you for what you do, what you promote, and for the efforts you put into promoting entrepreneurship. I can imagine,

That what you do is hard work, requiring effort, time, and money, and doesn't yield immediate dividends. But believe me, even if you don't feel immediate rewards, there are still results—everyone who has ever heard or read your words has thought about starting their own business... and that includes me.

I'm a Russian speaker from Eastern Europe who was fortunate enough to live in the States. I have a dream job, a house with a pool, a high salary, a nice car, and vacations.

on the beaches and ski resorts, in general, everything that many associate with the ideal life. And I associated it... until I read your book, Oleg. In your biography, I found many parallels with my past, and your story showed

I know I can have a much more interesting life if I so choose. Over the past six months, I've written a business plan, bought a ticket home, and quit my job last week. I'm going back to Europe to start my own business—your book alone was enough to motivate me, and thanks to the show "Business Secrets" and your blog on LiveJournal, I haven't had a single moment when I wanted to "back off," in fact, my confidence in success has only grown. I'm sure my parents and friends won't understand my decision (they don't know anything yet), but that doesn't matter at all, because "I'll be the one doing the rest," and all the mistakes, falls, and failures will be mine, just as the experience, victories, and feelings I've gained will be mine.

independence.

I'm sure my example is one of thousands that prove that your words reach people. You're doing everything right, Oleg, and thank you for that on behalf of everyone whose life

"You changed."

In May 2011, we launched the "Your Stories" project on Tinkov dot com (tinkov dot com U.R.L).

publishing stories submitted by young entrepreneurs.

I want to explain to young people that entrepreneurship isn't about stealing and kickbacks, but about hard work and creation. I hope this book will also contribute to the development of capitalism in Russia.

Chapter 22 To Be Or Not To Be?

When I was a student, studying at the Leningrad Mining Institute, I wanted to earn money a little more than my deskmate, I wanted to travel abroad a little more than others, I wanted to live a beautiful life, buy Levi's jeans, uh-dee-das sneakers and go to restaurants a little more.

Young people complain that things were supposedly easier for us in the early 1990s. They say the markets were empty, everything was free. But I think that right now there are more opportunities for start a business. Young people today have so many advantages: the Internet, the opportunity to study abroad. We never even dreamed of this. Getting into the institute was already a dream for me. unimaginable luck.

I worked hard to buy the coveted uh-dee-das sneakers. I washed and cleaned them every day, put them out in the sun to dry, and fussed over them. I traveled twice a week by train to Germany, from Leningrad to Warsaw to Berlin, delivering goods. I slept at the Berlin train station because a hotel room for 30 marks seemed impossible expensive.

Back in the 1990s, as a businessman, when I bought Benetton pants at TsUM, I'd call all my friends to tell them about it. I'd even come by train specifically.

"Red Arrow" from St. Petersburg to stand in line and eat at McDonald's, and then come back and tell friends.

We were driven by a huge desire; we went out and worked hard. My generation grew up on the songs of Tsoi, Shevchuk, Grebenschikov. We wanted something, but I don't see that same desire in young people now. I want to reverse this trend. Everything comes too easily to them.

These days, any student wears good sneakers, and if they go to Chelyabinsk or Berlin, they'll stay in a hotel, not at the train station. Today's youth can go to McDonald's every day and gain weight. And they complain that we had it easy. We had it so hard, you can't even imagine!

Why has today's youth lost their drive? It's unclear. However, if you've made it this far in the book, you're not one of the passive herd. You want to take action, to change the world around you for the better. That's good enough, but unfortunately, it's not enough.

An entrepreneur must have innate qualities: the ability to take risks; the ability to choose the right strategy; the ability to select the right people and manage them, their emotions – this is from the field of psychology.

An entrepreneur must be smart. Stupid entrepreneurs don't survive.

go bankrupt. We all have roughly the same cranial cavity and brain size, however... An entrepreneur must be cunning.

An entrepreneur needs to think positively. My brain is designed in such a way that I don't remember things. Bad things, I just move forward.

Of course, there were failures, it was difficult, bad. I didn't dwell on them, but saw the goal and went towards it. I have nowhere to retreat - I named the dumplings after my daughter, the beer, restaurants, and the bank - after my last name.

But now I have something to be proud of, and that's worth a lot. I created five completely different, unrelated businesses at different stages of economic development, in different fields—that's awesome. And they all turned out to be successful. Even though I don't have any special talent, I just have tremendous hard work, desire, and tenacity. If each of you wants and works just as hard, you'll achieve just as much, and even more.

An entrepreneur must have aggression. But not external, but internal. Aggression isn't about kicking down doors, but about self-flagellation, about being harsh with yourself.

Aggression is about achieving goals. Not compromising, working 15-hour days;

prove to everyone that you can.

An entrepreneur must be rational enough to accept non-trivial, often tough decisions.

An entrepreneur should get a thrill out of their business, viewing it as an exciting game to win.

We only live once, and it should be interesting and fun. I dislike boring people, mediocrities, and "people in overcoats" the most. It's better to die than live like that.

Drive is important to me! I always go to work with great enthusiasm and enthusiasm. And I advise you to do only what interests you and gives you joy.

An entrepreneur needs balls of steel and a stable nervous system. If you don't want to be nervous and wake up sweating at night, it's better to be a manager. There are great entrepreneurs, and there are great managers. Success can be achieved in both ways. Each of you must figure out which is more appealing to you.

I don't divide people into first and second class. I have talented people working in my organization.

managers, but in my opinion, they cannot be entrepreneurs. They are not capable

They don't want to take risks, they don't want to work past seven o'clock, they don't want to get too tired—and that's their right. Their thinking is structured in such a way that they are professionals in their field. They do what they're supposed to do well, from start to finish.

Of course, an entrepreneur takes more risks, but also earns more. That's how life works: He who takes risks drinks champagne. He who does not take risks drinks white wine.

If you're attracted to champagne and Rolls-Royce, that's just one side of it. The other side is Working 24 hours a day, taking risks, thinking about business all the time. And the possibility of losing everything overnight. Business is cyclical. Every 10 years there's a crisis in the world. In Russia—More often. Because our economy, and our country in general, is a function of the price of oil. Not a single genius in the world has yet learned to determine the value of oil. Even analysts at Goldman Sachs, a preeminent global financial institution and my partner at Tinkoff Credit Systems Bank, are unable to forecast the price of oil more than two months in advance.

Many people try to analyze processes and write multi-page reports on the Russian economy. But it's all simple. The price of oil is 30 dollars per barrel—in Russia. There's no economy; 50 dollars—it's fluttering; 100 dollars—like now, and 200 dollars—we're in the chocolate. Unfortunately, we're just redistributing oil wealth.

Entrepreneurship is a huge risk, but you have to try. Those who don't try are wrong, those who try and fail are right, and those who try and succeed are geniuses. All of today's millionaires and Billionaires were once ordinary students. There are certainly future billionaires among you, I am firmly convinced of this. You have to try.

I urge you to do something. If all else fails, find a job with a good company. Selling your brains is also a good idea. All paths are open to you.

The only thing I don't recommend is going to Gazprom and other state-owned companies.

organizations, sit there and get paid. Young people are eager to get into customs,

The police, etcetera It's clear why—not because of high salaries. It's a fundamentally flawed mindset—not to earn money, but to take a bribe or steal. Stealing is humiliating.

The corporate structure there is set up in such a way: if you are bright, understandable, honest and smart - you won't survive. All the grayness is attracted to this swamp. If you're bright, why Should you go there? It would be better to get a job at a Western company and do the same thing.

But there they have clear approaches, clear salaries, career growth. But here—what kind of growth? You have to kiss your boss's ass! There are shady, disgusting things happening there, in the worst possible way.

Soviet version. I would put in this row not only Gazprom, but also Lukoil, and a bunch of other semi-Soviet organizations.

I periodically meet with employees of these essentially state-owned companies -

You won't meet any bright people there, they don't belong there, they don't wear red sweaters and orange ties. They're gray. These clerks create barriers for businesses, for talented people.

to people.

Everything I write doesn't mean you have to up and drop everything and start your own business. If you're a student, of course, study first. If you're so smart and talented that you have time for work, then by all means work.

Don't follow my example in this regard. I dropped out of the Leningrad Mining Institute in my third year because I didn't see any potential in the profession; I was making money through speculation, and I had little time for studying, and then there were these geometry coursework! When I was at Berkeley, I had no time for work at all. Study first, and then work—if it works out.

Traveling abroad can be very helpful in understanding business. If you have the opportunity to go and study somewhere, live for a couple of years - I highly recommend it.

Russian universities are good, but Western ones are better. It broadens your horizons. You should go, study, see, and come back. Or not—it's your choice. Those who studied and lived in the West are immediately visible. But in Russia, it's easier to do business, and there are more opportunities. In the West, everything is divided; no one is waiting for you there.

Many who study abroad think they'll stay there to work. But believe me, going

Working as a junior at an investment bank for £30,000 a year is wrong if you have an entrepreneurial streak. My daughter—let her go, she's a woman. But if you're a man, with two brain cells, why spend several years?

Should I sit on my ass at an investment bank? I need to go to Russia and apply it here.

I started out speculating, essentially redistributing goods: I'd transport warm clothes from the south to Siberia and sell them for a higher price. What would I do now if I were younger? Of course, you can't bring gum and Levi's jeans back from London anymore. Some people try to make money, for example, on iPads. By the time they officially arrive, several tens of thousands of "gray" ones are sold. But it's all temporary.

My general advice: look abroad to see what works well there and apply it in Russia. The market there is highly competitive and innovative. You need to take ideas from there, bring them here, and try to implement them. If it works, you'll immediately see a big profit.

I have lived in three countries, I travel a lot and I will say something that may seem paradoxical to some: It's easiest to do business in Russia!

And all this complaining about the S.E.S is nonsense. It's possible to do business in Russia without bribes. And, by and large, small and medium-sized businesses in Russia don't pay government officials. Perhaps just a few small bribes, like to some inspectors, but they say they've already brought order there, too. Aspiring entrepreneurs have nothing to fear; corruption is at a much higher level here.

But I recommend you never use corruption for business. I've never done that. Once you resolve an issue this way, you're putting your business at risk. You're out of the market, out of competition. It's like in sports: you can bribe the judge, but when you get to the starting line, you still won't make it. You're deceiving yourself. You need to be on your toes, in the market.

I am convinced that 5 to 10 percent of the readers of this book will become dollar millionaires. Don't forget that this is probably the only book on this topic published in Russia in 2011. In America, England, or France, for example, a similar book is probably published once a month. Millions of people read such books there, but only 0.5 percent of them ultimately achieve success. Consider the difference between 0.5 percent there and 5 to 10 percent here.

We live and work in the right place. It is precisely because of its underdevelopment that Russia It creates a huge number of business opportunities. We don't have the fierce competition we see abroad, so a smart, smart, and talented businessman can enter any market and, with their smart actions, crush the competition.

Why don't you do it?

It's up to you to take action from now on!

the End of the Book

The paperback version of Oleg Tinkov's book "How to Become a Businessman" was published in September 2011 by Eksmo and Alpina Publisher.

Output data:

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T 42

Tinkov O.

T 42 How to become a businessman / Oleg Tinkov. - M.: Eksmo: Alpina

Publisher, 2012. - 256 p. (Oleg Tinkov).

I.S.B.N 978-5-699-51390-1

Oleg Tinkov is a legend of Russian business, a true brand figure and a vibrant, charismatic leader. He's already built five successful companies in a wide variety of industries, so he knows everything about starting a business from scratch and growing it into a multi-million, if not billion-dollar operation. Is it possible to follow his path and become just as successful? Oleg is confident. That's why he wrote this book.

What does it take to become an entrepreneur? How do you choose an industry to work in? Where can you get startup capital? What name should you give your business? How do you hire the right people?

When should you exit the market? Oleg Tinkov answers these and many other questions he's most frequently asked by people dreaming of becoming entrepreneurs. This book isn't boring advice, but an illustrated, practical guide, and once you pick it up, you'll immediately feel a surge of new thoughts and ideas.

The book was prepared with the participation of Oleg Anisimov

For a wide range of readers.

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