10 secrets to business success in Russia

Reading Time: 8 minutes
  • by Ajay Goyal

I have created 8 companies and businesses in Russia in the last three decades. Every effort I have made has brought me an enormous financial reward.

As I start my next Russian ventures I have been looking back and introspecting what has made this journey of entrepreneurship in Russia so fruitful for me.

Once I got the answers it also became essential I share them.

In June 1988 I was 22, I was in Delhi, India, and I had two jobs. I had graduated as a mechanical engineer at the age of 20 and I was one of the youngest engineers at an international corporation. I was working as a sourcing executive for export of Food processing and Pharmaceutical plants to the Soviet Union.

My second job was a TV anchor at Indian national TV Doordarshan. I used to host quiz shows, discussions and interview cultural icons. I was somewhat of a celebrity. It was cool for a twenty-something to be a star but surprisingly the export job was more exciting to me — the Soviet Union was going through “perestroika” and “glasnost” and there was this sense of a great change coming that I wanted more of. Through my engineering education years, I had been reading Russian classics of Sholokhov, Tolstoy, Dostoyevsky, Gorky, and even Turgenev and I always had a yearning to go see the land of Volga, Cossacks, love, and war heroes.

In summer of 1988 I sold almost all my belongings and used up all my savings to buy an airline ticket, exchange some Rupees into US$ in the black market in Delhi and took a flight to Moscow.

I returned to India after three weeks, created a company, and six months later I was in Moscow to start a new life. By 1995, six years since the start of my Russian adventure and much tumult [ I stood in human chains outside Russian white house in front of tanks during 1991 coup] the business turn over was well over US$ 200 million.

Since then, during these 30 years, I have traveled the length and breadth of Russia and gotten to know the country well.

Then, at age 32, I “retired” because I sensed something ominous was coming because of all the criminality and corruption with thousands of American bankers swarming Russia, plundering its wealth and sowing complete disorder and chaos. The suffering of the Russian population was heartbreaking. That is not why I risked my life in 1991, I said to myself, and that cannot be the impact business and profit should leave on a country. That was in 1997 and it was time to leave. Sure as hell, the Russian market collapsed in 1998 and the Russian treasury and banks defaulted on their obligations. It was complete chaos followed by the vapour trails of all the western experts and bankers leaving the country. They believed Russia lost, finished, defeated.

I sensed to the contrary, a true and real new opportunity to make a difference. After a two year absence, I returned in 1998 and created The Russia Journal newspaper and media group. I was the publisher and Editor-in-Chief. So solid and insightful was the journalism of my paper that nearly every prediction and analysis my newspaper made of the Russian economy, politics or business turned out to be 100% right. Russia was going to turn a corner and Vladimir Putin was going to bring order and end the grand larceny of Russia is what I predicted. I was right on all accounts, every day, for nearly 7 years.

By 2006 the foundations of a new Russian state had been laid and the Russian economy had shifted its direction. It was time for me to leave again — there were fewer opportunities for me, more for others. Subsequently, I returned only occasionally in the following decade.

Early this year, I started to consider a return to business in Russia.

During these 10 year’s much has changed in Russia. It is a new country — a new nation built on new ethos, a new constitution, a new vision, and new dreams. There are new opportunities and for once there is peace, order, safety and a chance to plan and implement a greater vision.

I created Russia Journal in 1998 because I wanted to be a part of a new Russia. I wanted to give back and make a contribution to the prosperity of Russia. My newspaper The Russia Journal, the only English language publication to give a true insight into Russia’s business potential, became a part of this process of open the world to the changes and potential of a new Russian state. I am proud of the fact that truthful and insightful reporting and analysis by my newspaper — the only one in the English language published with honesty, integrity, and respect for Russia, moved many corporate boardrooms to take a new look at Russia and launch their businesses in the country. The Russia Journal has been an important part of the early years of this great transformation of Russia.

Russia of today and tomorrow is one of the most attractive places in the world to do business. It is an open economy with minimal bureaucracy and low taxes. The quality of life is so good, I keep meeting new American and German expatriates on every trip to Moscow and Saint Petersburg.

While Russia and its economy and the lives of ordinary people are changing for the better, the essentials of Russian character and ethos are thankfully constant. It is important to know them if you are contemplating business in Russia.

These are ten pearls of wisdom I can share that have helped me achieve great success in Russia:

  1. Know Your Russian literature: I learned Russian language slowly and over 3–4 years through practice without going to a language school. But I knew so much of Russian culture, art, and literature that conversations, social engagements, and friendships developed naturally for me. I made hundreds of friends from all spheres of life and I remain friends with many of my clients and business counterparts. If you are a cultural and literary creature — in any way, in any literature or culture of any people or country — you will earn the respect of Russians. But if you can have a discussion with them on Russian classics, poetry or art and music — you will earn their adoration.
  2. Know Russian History: Take some time to learn Russian history and the great heroism, sacrifice, and sufferings of Russia and Russians. Understand the enormous upheavals through its history without judging them today. If you do not know Russia history, you cannot ever understand Russia and Russians. Try and read history that is not embellished by western biases.
  3. Integrity earns respect: I have seen many a buffoon and conman in the 1990s come from the US or the UK and make quick bucks in Russia. These individuals had some skills and no knowledge of history and humanity. They knew how to create “schemes,” and enrich themselves, bribe and corrupt, steal and then launder wealth out of Russia. These were men of knowledge and skills but no integrity. They were once respected but not anymore. Russians respect women and men of integrity for building long-term business relations. If you tend to waver in the wind, are prone to expediency, lies, and deception to make a quick profit — you will not make it in today’s Russia.
  4. Be Ethical: Do not pay attention to business corruption indices and statistics of corruption in the country. You do not have to believe any of them — just listen to the annual state of the nation speeches ( they are all available in English) by President Putin to know that corruption is a serious and debilitating problem in Russia. The worst schemes of robbing Russian wealth were designed in 1990s by highly skilled American and British advisors, economists, and bankers. There is no place in Russia for such people anymore. There are enough of homegrown corrupt bureaucrats and businesses and the country is waging a war with them. I have never paid a bribe in my 30 years in Russia. This meant letting go of many deals — none that I ever regretted. Be a part of the best of Russia because joining its worst will only bring tragic outcomes.
  5. Do not believe what western media tells you: I have the first-hand experience of Russia, its business and life and I find almost all western media coverage of Russia deeply disturbing in how biased, embellished and mendacious it is. Moscow Times, a local foreign sponsored newspaper since the early 1990s is the fountain of all anti-Russia poison and bile. Nearly a million people visited Russia during the summer of 2018 for world cup football. Nearly all of them returned with evidence that western media lies about Russia. Trust your own observations and the lives of those you meet in Russia. Read between the lines and make up your own mind. You will find that Russia is a Potemkin village in reverse — the reality is far better than the image.[ the western narrative of Potemkin village is a lie, too — Count Grigory Potemkin was a great visionary, general, strategist and builder and he did not do what the then British Ambassador wrote he did to create the negative myth.]
  6. Experience it yourself: Enough of reading and research. There is no alternative to trying things. The barriers to business entry are so low that opening a new business is a child’s play. The tax system is so streamlined a 12-year-old can understand it. Taxes are so low, it is strange Russia is not considered a tax haven. It is extraordinarily easy to start a new business in Russia so just start.
  7. Partnerships are not recommended for the first few years. In Russian “partnership” is a loose term — it can be a person you deal with as a counterpart. Or it can be someone you did a buy-sell transaction with. Russians refer to counterparts with respect, as partners. Get to know people, do business with them, prove yourself, verify that they are real and only then create a partnership. When you do, make sure everything is in writing to avoid misunderstandings.
  8. Do not drink just because they do, and they don’t: Cultured and educated Russians in business do not have a drinking culture anymore. I can think of half a dozen European countries that do but it is rare for new Russians to touch a drink for lunch or during a working week. A glass of wine or a beer at the end of a long day, perhaps, but certainly not the kind of hard drinking they are stereotyped for. I am surprised by how many Russians Do NOT drink at all. So do not try to impress Russians with your drinking — it will have an opposite effect and they will lose respect for you.
  9. Treat women with respect and you may flirt: Russian women have had an equal status in society since Soviet years. Russians have nothing to prove to the world in terms of gender equality. And yet, women are treated with a manner that is borderline flirtatious. You may give compliments to wives of business partners, dance with them and give them gifts. Giving flowers for no reason at all is always appreciated. Making toasts about the beauty of women is a sign of chivalry. In short, women like to be treated as women but they are not the weaker sex and they know it. There are no complexes about the issue. Treat female employees, colleagues, and officials with deference and — as women. Harassment, molestation, touching and being awkward is so American that Russians detest it.
  10. Polish Up and Be yourself: Russians respect sophistication of manners, knowledge, and intellect but no Russian likes a fake, loud-mouthed show-off. Upgrade your software and then just be yourself. Russians will accept you as you are. This is the least racist country in Europe and the west. Hundreds of ethnicities, religions live together in the Russian Federation. You will not experience any discrimination in Russia. I am Indian and I have felt race and racism almost everywhere in the west except in Russia. Be self-aware but then just be yourself.

If you are already in Russia or thinking of starting a business in the country, there is one more rule that has been central to my own success.

Russians are long on patience and time and they come from a land so damn cold it just ain’t worth getting out for bed for cheap.

Think big, think grand and have a massive long-term vision. Go for big money, big profits and Russians will love you and conspire with you for your success.

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