'Dances On a Rake' or How Russian Business Works

How to create new market niches for the business? Why does Internet-business attract all of us so much? E-xecutive.ru asked these questions a participant of our Community Sergei Arkhipov, the graduate of MIT Sloan School of Management and Harvard Kennedy School, the founder of start-ups 'Eat in the city.ru' and 'Element 14'.

E-xecutive.ru: Internet business is the fastest in start. Tell us your 'short' story, why did you decide to start this online project? And what did you do before?

Sergei Arkhipov: It isn't so fast…

In 1990s and 2000s I was a businessman in the sphere of media. We started a small printing press practically from zero and it 'grew up' to the market leader in the sphere of entertainment media - crossword puzzles and crosswords, newspapers and magazines, e.g.'777', 'Sudoku', etc. I speak about the crosswords, on which people usually work in public transport, in the country. We've been the first, who identified the segment and directed all our resources at its development. That is, we offer not only printing and design in their pure form, but a full chain of services one stop shop. At that time big printing houses were either state-owned or recently privatized, and they neglected such newspapers. They needed multiple page newspapers. And therefore they ignored small orders.

Considering it, we managed to create very effective business model, which still dominates in the market niche.

E-xecutive.ru: So, it is your version of project 'Grupon's'? Were you inspired with it?

S.A.: No. We, unlike 'Grupon', count on mature business, which has unfilled capacities. We bring clients in very small amounts every day. And 'Grupon's” model is, if you want, 'tsunami' which at a time brings down a huge number of clients, with whom it is necessary to work very effectively, if you want them to come back and bring profit in the future. My project is slight ripples on a lake surface.

I was inspired with Restaurant.com, an American model, which has already existed for 10 years, and in which eighteen thousand restaurants in the USA trust. When I studied in America, I traveled a lot around the country. I got acquainted with this service and realized that I like it. Coming to a new place, you don't know where to go, where to stay. A guest always has a risk-factor. He thinks whether to look for a restaurant in unknown neighborhood of a new small town or just stay in the hotel restaurant, which is not so interesting. What if a restaurant will be worse than the hotel one, or I won't find anything interesting at all and lose time. Any risk should be justified for a person. 'Restaurant' or 'Eat in the city' models offer to save in this case.

E-xecutive.ru: So, what inspired you to go for the Internet?

S.A.: As the atmosphere in MIT is technologic, entrepreneurial and I am a businessman, so I launched two projects: in the energy sector- 'Element' 14 and 'Eat in the city' for three years in Boston. The first start-up relates to receiving solar energy. We are invited today to be the residents of a cluster of power efficiency “Skolkovo', where technology completion will proceed.

E-xecutive.ru: You said that it isn't a quick thing to start an Internet business. What did you mean?

S.A.: They say that an Internet project can be started on a knee, sitting in a garage. Yes, but it in no way says that it is fast, simple and without any painful moments.

We began testing the idea of ​​'Eat in the city' in May, signed contracts with the restaurants - in summer, and opened the site to users at the end of November. All this time we have been testing and correcting the details of business idea, and now are testing and revising, and will continue. Here there are a lot of components, which affect the quality of your equation. When you change elements of this equation, you will get completely different results. Therefore, stories, common to the RuNet, where businessmen tell how they gathered the team and launched the site in a week are just bravado. If you look at Mark Zuckerberg, Sergey Brin, at all great entrepreneurs, who really created a new business model, you will understand that it took them years to reach their present success. I completely disagree with a statement that you can successfully do something very quickly in Internet business, besides, I find this statement dangerous, because it discredits the business itself. If you want your business to work well, you should give not only money, but also the soul and to spend a lot of time. 

Nuria Fatykhova, E-xecutive.ru


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