Today is the Day of the Russian Entrepreneur…
Photo Credit: Shutterstock
…which I guess is sort of like dressing for the job you want, rather than the job you have.
I fear I will disappoint my loyal readers today (both of you) since I am really hitting a wall on this one. I can’t think of anything to tell you about Russian Entrepreneurs…because I’m not sure there are any. There is an association of Russian Entrepreneurs, but it is staffed by government flunkies. I know several people who have started and (more to the point) sold successful businesses in Russia…but they are all foreigners. Nowadays, everyone wants to either work for the government or for a foreign company. No one seems to want to start a business, and, you can’t because the paperwork is so complicated. Even HRH, who started off with a kiosk selling cigarettes and beer, has decamped to higher ground.
I was having a very interesting conversation on just this very topic with the father of one of Velvet’s classmates last week. He noted that Poland seemed to have done very well after the Fall of the Wall.
“Well,” I said, “that’s the whole Roman Catholic thing.”
He was riveted. We talked between Hayden concerti and acapella singing groups about how the countries with an Orthodox Christian heritage don’t have any tradition or understanding of an individual’s sense of his own place in the world, or an ingrained conviction that you can, and should better yourself. Think about it: Poland, Slovenia, Hungary, Czech Republic, Slovakia, The Baltics and so on are all predominantly either Roman Catholic or Lutherans. They are doing well, whereas Russia, Serbia, Belarus, Ukraine and Romania, the Orthodox countries, are still struggling to implement positive change 20 years after the Wall came down.
If I were a rich man, dah-dah-deedle deedle deedle deedle deedle dum…
~ Tevye from Fiddler on the Roof
I wracked my brain while writing this post, and as I was on a train with no wifi, I couldn’t turn to my friends in cyber space for any inspiration. I wanted to come up with a shining example of 100% Russian entrepreneurial success that:
1. Wasn’t linked to either the wild 90s acquisition of former Soviet industries like Norilsk Nickel or Severstal.
2. Was not in someway connected with a foreign manager, foreign investment, or foreign know-how.
3. Is not a government or semi-government company
4. Is still a viable business…by which I mean the CEO is not in financial exile in London.
Not easy.
There is this Russian Silicon Valley getting up and running: the pet project of Blogger-In-chief Dmitry Medvedev and Ashton Kutcher, but until that begins to bear fruit…we’ll just have to have a modest celebration today.
I don’t know…this is like a flat pancake day.
Technology definitely has entrepreneurs, not as many as there should be given the number of software developers but still…
http://www.yandex.ru (64% search share, take that Google)
http://www.kaspersky.ru/ (global anti-virus)
http://www.1c.ru/ (everything but the kitchen sink)
I am suffering from way too entrepreneurial partners and employees who all seem to want to start a new venture every few months. Sometimes I feel like the Aunty Em of the group – “there’s no place like core business”. They want to start them up, but run them . . . that is a different story altogether.
A few reasons why the levels of entrepreneurialism are lower in Russia than anywhere in the world (except Belgium): lack of available funding for start ups or existing businesses (no-one to share the financial risk with); odious bureaucracy for opening (and closing) businesses (meaning many new ventures stay ‘off the books’); high fear of failure levels amongst potential entrepreneurs (as a result of the former two). This makes the only game in town the government, which is similar to other commodity rich countries – even some Roman Catholic ones like Venezuela. The level and success of entrepreneurship in a country is perhaps less to do with cultural reasons than with the ‘rules of the game’. This is why Entrepreneur’s Day in Russia is a step in the right direction in bringing prestige and government focus/financing to it (e.g. ‘Silicon’ Valley) because, as Liz points out above, there is no lack of talent here and as Tetya points out (and I can confirm) the problem is often stopping Russian’s from being too entrepreneurial.
Oh, and you might want to attend the AmCham meeting on Friday—Ester Dyson is talking about bringing some Silicon Valley VC firms to help Russian tech entrepreneurs.
And finally, Poland thrived because everyone left to work in the rest of Europe and send money home. Russians don’t have it as easy.
These are all very astute and excellent comments! I am learning so much today! We can only hope that the climate for SME will start to improve. I’ve had like 200 ideas for very viable businesses while I’ve lived in Russia, andHRH just shoots them down because he says there isn’t the infrastructure to support it. I suppose he’s right. Thanks so much to you all for weighing in today!
Great post, Jennifer! I’d add that by definition the entrepreneur is someone who looks long-term and therefore, has the ability and capacity to see and believe in “long-term”. In Russia long-term has never figured in people’s thinking (it’s actually a cultural thing) and, thus, everyone wants to be paid now, or even yesterday. So even those who start businesses expect them to turn a profit the day after and, if they don’t, well … they give up or move to the next thing.
Really interesting post – never thought about the different effects of the two religions. Don’t know anything about entrepreneurs in Russia, but have always liked the word ‘oligarch.’
Jennifer,
I wandered into this post from Linked In. Religion is a corollary and not the cause. Countries which did relatively well had either a good affiliation or years of good development of independent business not far removed from present. Poland, Baltic, Hungary, etc had 20+ years of independent capitalist run before they were swallowed by Soviet empire. Out of all countries Russia was the one that was never able to decentralize to a degree where Ekaterinburg and Saratov could do business without consulting the capital (Moscow or SPB)
EXCELLENT post jennifer! i love that you put out a topic that you’re passionate about and are not afraid to ask for weigh-in rather than spout answers. very well done, indeed! so happy to have found and connected with you!
Dear Grumpy: you make an interesting case. But do you not think that the lack of a sense of individualism is the root cause? I take your point about Poland, Hungary and Baltics, but I also think we need to look at the cultural backstory…Thank you in any case for weighing in with your interesting ideas. I hope you’ll stay tuned for more Russian holidays. What’s your backstory?
Dear MM –
Many thanks for wandering over here on what must be a busy day for you. I was so surprised to find that this post, which I thought was very lackluster indeed, provoked such a flurry of responses. Ah, the joys of blogging!