What was your childhood like?
I was born in Rivne and lived there until 12 years old. I entered a specialized English-learning school where as first graders we had a luxury of listening to Beatles and reading Fennimore Cooper in English. Then, in the 70s, English language was like a “window to Europe”. Rivne was located relatively close to the USSR state border so many people were able to listen to western radio stations or read foreign magazines which someone brought from trips abroad occasionally. It was a small peephole into non-Soviet world. Then my parents moved to Kiev and I went to math school. It was very difficult for me to adapt, I never studied so much mathematics. But in the end it proved to be useful when I was transferred to a new school. My parents moved to Vyshgorod, and there I went to regular school. It was so full of students that my father had to bribe someone at the administration with a barrel of paint so I can get accepted.
So, at schools I’ve spent some time specializing as humanitarian and some as mathematician, and up until 18 years old I was under impression that formal sciences is the way to go for me. But when I joined the Instrument Engineering faculty of Kiev Polytechnics University, I’ve come to realize that it is not (smiles – ed.).
But learning mathematics has been useful for me – it helps structure the brain and provides the ability to work long hours to solve a huge number of equations and tasks.
Did you make use of these skills as a businessman?
It’s hard for me just to sit and do nothing, at the same time I can’t take much of the routine and monotonous work. When I had to work on something for weeks, I would always force myself. In business I can not help it either. I often think that when I joined Kvazar-Micro, it was just a workaholism at first. We had only one day off in a week, sometimes even none. And I thought it was ok. Actually, everyone around me thought it was normal. We’ve spent a few years in this mode, so when it stopped at some point, I could not think of anything to do on Saturday except work. We’re that enthusiastic.
Where did you work prior to Kvazar-Micro?
During student years at KPI I worked as a nurse at Pavlovskaya Mental Hospital in the department of severe alcoholic psychosis for three years. It was grunt work but it paid well. Then, in the 90s, I got a job with a travel agency and was in charge of organizing shopping tours.
Shopping tours for shuttle traders?
Yes. We had to arrange bus transportation, passing through the borders, accommodation. Since then I have great respect for shuttle traders. These people have dressed and fed not only themselves but the entire nation. Former engineers, doctors and teachers were carrying these huge duffle bags on their backs, tormented by market mafia, customs officers, and border guards. They made the first contribution to the entrepreneurship in Ukraine. I, for instance, could not bring myself to do it. I was afraid that my friends will see me on the market and could not overcome myself. But this job did let me to take a peek at the world abroad – small border towns of Romania, Bulgaria and Poland.
Back then there was a cultural void between Soviet citizen and a foreigner. Did things change since? We’re different that’s for sure, but how?
Speaking of us as a Slavic nation we are quite disorderly, disorganized. We have little discipline and are not very productive. We despise the law, yet we often live by the rules of the thugs’ world (po ponyatiyam). We laugh at foreigners who never cross the road on a red light, even if the street is empty. It’s silly, right? But they wait for their turn. A senior manager at Philips once said: “Our countries are different – in yours almost everyone knows how to repair a TV, and in ours almost everyone knows how to sell it.” This notion explains a lot. They have the strong entrepreneurial spirit, the sense of freedom and responsibility. In our case it is a spirit of paternalism. I’m always surprised that our young generation views are so paternalistic. It’s ok with the older generation, but the young people… A lot of people in our country are irresponsible. They do not want to face the truth and admit it when they don’t know how to do something. They perform worse than the Chinese or Indians, but want to live better than the Germans.
In 1993 almost everyone saw some kind of opportunity in different kinds of trading, and only a few were willing to pursue their professional careers and actually create something. Why did you join Kvazar-Micro?
I got there by pure chance. After I graduated from KPI they politely asked us to sign a paper saying that we have no complaints about the employment. Our department was a military one, so the only work they could offer to us was at military plants. I just signed the paper, no hard feelings. The hyperinflation was raging. Everything around us was falling apart. Money was depreciating really fast. Now, by the way, we have a similar situation.
Then my childhood friend advised me to take a look at Kvazar-Micro. Then I had no idea about computers or technologies. He said I’ll get into it quickly, that there’s nothing to be scared of. He began to train me for the interview, telling me things about computers, some kind of specifications… I was completely lost.
At the interview I said that I know everything they’d ask me about, outrageously lying at times (laughs – ed.) A person who interviewed me, my potential boss, was silent for a few moments, and then he said: “You’ve got talking skills, you’ll be a salesman.” I was like, whatever, I just wanted to get a job with a private company that had computers. It was unbelievable, I was ready to work for free.
But they were paying, didn’t they?
When I got my first paycheck, $15, it just turned my world upside down. I didn’t know such amount of money even exists. At that time my mother who worked at the Ministry of Energy and had bonuses for years of service exchanged her monthly salary (a pile of rapidly depreciating coupons) for $5. I spent 15 years with that company and it was a very interesting period of my life.
You said that in the beginning you had a great deal of enthusiasm at work. Did Utkin contributed to it? What’s it like to work with him?
Both his achievement and the most correct step was that he gave us a great deal of freedom. I was doing whatever I want, once I even threw $150 thousand down the drain.
How did that happen?
I ordered a huge delivery of uninterruptible power supply units delivered by plane, around 15 tons total. We’re overstocked. Once we got them it was obvious that selling them all would be impossible. The company really took a hit with this order, and at that moment they asked me for the first time – what the hell are you doing? Of course I’ve had my reasons, I had to explain a lot, and ultimately there were losses for the company. But in general, it was a time of freedom when I would sign all contracts, set prices, market and sell the product – all by myself. There was some kind of supervision, of course, but I don’t recall how it went exactly.
Then for the first time I went abroad for real, to a civilized abroad so to speak – to Paris. My travel expenses were $40 a day, so in other words I was given a year or even a year and a half salary for this business trip. Have you ever got paid for half a year in one setting? I never had such luck, neither before nor after (laughs – ed.). And, of course, I was really impressed by Paris.
How long have you been an average executive?
I was a salesman for a very short period of time, in two years I was appointed director of the department, and in 2000, seven years after joining Kvazar-Micro – the vice-president of the company.
Have you become a shareholder?
Yes, if I remember correctly, in 2002 I became a shareholder of Kvazar-Micro. In 2004 we began our “great march” to Moscow when a majority share of AFC Sistema was sold. For four years I worked in Moscow, almost living on airplanes. In 2008 another part of shares (49%) was sold and then I quit. After that I was in the best emotional state in my entire life.
Why is that?
You know, all these four years I couldn’t get used to Moscow. It is a city very tough to live in. When I left, it felt great, it was a joy. When I sat on my couch in Kiev and realized that I do not need to get on a plane and fly to Moscow the next day, it was a happiest moment.
How much money did you get after that shares sale? Did you become a millionaire?
Not a millionaire, but something along the lines. We’ve invested everything in the new company KM Core. So formally the money exist, listed in the table somewhere. In 2008 I did not know what to do with that money. As an individual, I am quite boring in terms of spending. I don’t have a Lamborghini, I don’t need an island, and I never felt the urge to hang out in the casinos.
So what are you spending your money on?
As I said, I’m pretty boring in that regard. Books, travel, I can’t pinpoint something specific I love to spend on.
How did you create De Novo?
After I quit I was just lying on the couch, sleeping, eating, working out. And rather quickly, perhaps two weeks later I realized that I’ve rested enough. At that time there was a group of people at Kvazar-Micro who wanted to make their own company. In March 2008 I bought us all trips to Egypt for a week. We were all sitting in the hotel room brainstorming and drawing our new company out. A week later we came back with a thick pile of concepts and calculations. Now it seems to me that this was just a child’s play.
But it did work out, hasn’t it?
Yes, but just picture us grown up men, responsible adults just sitting around and playing a kid’s game, coming up with a company of our dreams. We’ve spent a lot of time just talking things over. The talking began in March and ended in September. I deliberately did not want to hurry the launch of the company. It seemed to me that first we need to settle on every possible aspect of company’s life, down to the corporate culture. On September 16, 2008, we officially launched our new company. On September 17 the Government announced that Ukraine is officially hit by economical crisis. It felt like hitting a concrete wall… in the dark. The market collapsed, the hryvnia collapsed and the crisis took over. And here we are dealing with this situation for seven years now.
But the last year was more successful, as there were a lot of new contracts for De Novo?
Yes, it turned out to be better than the previous year. The company began to grow faster and returned profits.
And what has changed for you as company’s CEO?
The size and scale of the events last year made it very difficult for us to picture what is ahead, but we had hope. In January, no one knew that they would be shooting firearms at Maidan, what would happen in Crimea in March, and now we know all that. It’s all happened. Now the war is on, the economy is in ruins – a completely different situation. A potential investor asked us to come up with a five-year development plan for the company. Day by day I’m trying to get this done, only to realize I just can’t – it’s all too uncertain and undefined. But I understand that it should be eventually put it on paper, otherwise there’ll be no investments for us.
Service provider business requires considerable capital investments. When it comes to the cloud, it requires even more. In the first quarter only, despite of this economic nightmare we’re investing around $400 thousand to purchase new equipment, and there are similar plans for the second quarter. We always need money.
With Gods help we’ll be through all this bad things that are happening in our country. Although, as of now I am rather pessimistic because all of my 22 years of experience suggest that the economy doesn’t work like this. I mean you can’t do business suffering losses constantly. It’s better to go out, hide the money, bury it, and wait for the opportunity to leave the country.
Why don’t you leave?
I don’t want to. What will I do there? I believe that every man should live where his home is. Of course it’s great to travel and see the world, but you have to live at home. Earning less is also possible here (laughs – ed.). I doubt I would be able to earn more abroad, because the demand for experienced executives is not so great there. They’d rather relocate programmers and engineers. Anyway, home, like the motherland, is something that’s given once.
As a manager, do you have your own rules?
Firstly, I’m a pack animal, I just can not work alone. I just fall asleep. We have seven directors whom I always have something to discuss with. I hope that the directors see and appreciate it. Second, I have an inclination towards the loose-jointed democracy in management. Would I not be given a freedom at work, I would never be where I am now, so I give the same kind of freedom for my employees. I would first try to convince a person before giving orders. The goal is to convince people to invest their energy at work, but they won’t do it that easily. Therefore, a lot of time is spent in talking. Another thing to consider is the money. To me, work is like a sport. I’m interested in the development of the company more than in my salary. I told my directors that I’ve seen what happens to the companies where people are only motivated by money. Money can spoil a company from within, just like the worms would spoil an apple. That’s why I told my partners that I would not motivate people with money, because I need to develop the company. Those who agree can stay, those who don’t – well, goodbye then. Judging by the fact that nobody left, people, who, of course, would love to be paid more, heard and felt what I was trying to get across.
Did you make errors?
I have this one flaw – I can not make a tough decision quickly enough when all my experience tells me I need to part ways with an employee, or a business, or an idea. Every time I think that maybe something will change, maybe I need to give it a second chance. And every time it’s just delaying the inevitable. Next, I’m not a sprinter. Thanks to our foreign investors, we have the luxury of being able to run, stumble, fall, and eventually get up and run again. That is why we ahead of everyone. One more thing – I just can’t work when I can’t see the light at the end of tunnel, I always need a visible perspective, some kind of certainty ahead.
If you had a chance to do something that you hadn’t the opportunity to do, what would it be?
I would learn to play guitar professionally. But generally I have no regrets, I don’t like to reminisce about the past. The past stays somewhere inside you, I’m far more interested in the present and the future. All in all, I do not regret anything. I managed to work with a great company and got a chance to create a new company that turned out very well, too. I like it in my company.