Q&A with Roger Shashoua
1. WHAT MOTIVATES A 'SERIAL ENTERPRENEUR'?
The entrepreneurial spirit is hard to define. It can be so many things for so many people. Some are motivated by fear, others by their peers. What drove me was my sense of self-preservation and my mother's constant encouragement to renew our family's fortune. Serial entrepreneurs look to the achievement of their ever growing goals: they suffer; they celebrate; they seek co-existence and the positive aspects of life, and are adept at turning a minus into a plus. They play the game of international business not just for the accumulation of wealth, but for the sheer fun of it and the affirmation of their own visions becoming reality successfully. Their freedom of choice in new markets allows them to act as their instincts guide them, not only to challenge the system but to change it for the better.
2. AS YOU MOVED FROM ONE PROJECT TO THE NEXT, WAS IT DIFFICULT TO LEAVE YOUR OLD COMPANIES BEHIND? AREN'T THEY A BIT LIKE YOUR CHILDREN?
With children, it is a joy to see them leave and succeed. With companies, once you leave them and they succeed, you think 'that could have been a couple of hundred millions extra for me'. ITE Group is now worth US $1 billion. When I left (sold out), it was 'only' worth US $200 million. But for me, the real joy is not making an extra US $500 million or so. I am content with the recognition of the fact that my creation succeeded to such heights and is still growing. My constant desire is to set up new things and see them come to fruition, so I move from one industry to the next. I guess the serial entrepreneur gets a kick out of parenting more then showing pictures of his children's houses.
3. WHY SHARE THE SECRET OF HOW TO MAKE MEGA MILLIONS?
There is no secret, everyone can do it, and hundreds are doing it right now. It is a great ride and I can only encourage people to go along for it. Invest a couple of years of your life and create the opportunity to make mega millions in Russia, India or China. But what I also try to do, which is important to me, is to warn of the risks and personal sacrifices involved with the project. If you go to the regions, make sure you do not have dependants waiting at home for you. Your personal relationships will be placed under a great strain. Another reason I share this now is to make people aware that time is really running out to make seriously big bucks. By 2010, the regions of Russia will be saturated so entrepreneurs have to act fast and go now. This business of making money is like a game. If it is taken too seriously, one loses the sense of fun and adventure. If it is taken too frivolously, one looses the game. As in any game, whilst hoping to win, the entire point of playing is to enjoy the process itself.
4. IT APPEARS YOU HAVE A FORMULA FOR WHAT IT TAKES TO MAKE IT BIG IN RUSSIA AND OTHER EMERGING MARKETS
Today, in the regions, you can do what others did in the big cities 10 years ago. You go in on your field of expertise whatever it may be; you find a local counter part, offer him a partnership and get the exclusive rights for your project of choice in that market. Then you bring it to the West to activate your project and start counting money. That is the general picture in a nutshell. But the most important thing is to live in the culture for a couple of years, be with the locals, become one of them and listen to their advice as they listen to you. If you don't understand and embrace their culture, you won't succeed.
5. YOUR BUSINESS HAS TAKEN YOU FROM THE USA, AFRICA, THE MIDDLE EAST AND CHINA. HOW DID YOU WIND UP IN RUSSIA?
We came to the East via my last book. In the early 1990s, I wrote The Paper Millionaire and found the publishing industry to be extremely hostile. As I realised what it was all about, I thought I can do better than these guys. The literary circle was a very small-minded exclusive club and we blew it wide open launching the European Bookseller magazines and international book fairs all over Eastern Europe. That route took me to Moscow. One thing led to another and before I knew it, I was organising other shows and exhibitions in Moscow and became the largest foreign exhibition organisation in Russia
6. HOW DID YOU GET THE PEOPLE IN POWER TO CO-OPERATE?
By asking for their help and being nice to them. That is the simple answer. But you need to get to them first. You do that by being nice to the people they frequent and work for. Again, it is important to understand the culture of Russia, where an 'everyday personal contact' is the essence of networking (a hairdresser, trainer, ski instructor, receptionist or similar can be just as effective, if not more, as a political contact). In my case, I was able to meet influential people at the openings of my exhibitions and socially through invitations to their homes via my Russian friends.
7. DID YOU EVER RUN INTO ORGANISED CRIME?
In Russia, like any other country, organised crime exists and you cannot avoid it. At one of our motor shows, one of the heavies was looking at a bullet-proof car. He asked "Is this really safe?" "Sure," was the response. So the man took out an automatic machine gun and fired a full salvo into the side of the car. Sure enough, it was indeed bullet-proof. The man just said: "Good, I'll take two of them, but not this one, it is damaged." On another occasion, we laid out the entire foyer of a show with beautiful red carpet. The next morning, the day before the show, mind you, the whole thing was stolen!
8. DID YOU EVER HAVE PROBLEMS GETTING INTO RUSSIA AT THE TIME?
I myself never had, but on one trip, Harold Wilson was in my delegation. When customs officials at Heathrow asked the reason for us going over to Russia (back then in was still the Soviet Union), I joked with them saying that Lord Wilson was on his way to defect... a long time later, we were still at Heathrow...
9. WHAT CHALLENGES DID YOU FACE GROWING YOUR BUSINESS THERE?
In the emerging markets of Russia, you face day to day problems that you are not used to in the West. In the early 1990s, frequent government changes, new decrees and laws were announced and cancelled, routinely making it difficult for anyone to plan their business. Shortage of exhibition space limited our expansion. This was coupled with unclear tax laws that were not enforceable and made us operate our businesses on the edge with little security for its future. The risk/reward ratio was certainly the main motivator for us to continue. Even after becoming successful and very profitable in Russia, the challenges continued with the collapse of the Rouble and the whole financial banking system. After this, I felt it was time to sell, valuing the company at US $200 million in 1998, only to see it grow from strength to strength to US $1 billion today, nine years later. Such is "what Russian dreams of success are made of."
10. HOW IS CONDUCTING BUSINESS IN RUSSIA DIFFERENT FROM DOING BUSINESS OVER HERE?
It is networking - without networking, you cannot do business in Russia. Business is transacted on a personal basis with or without capital. Trust is essential and if anything goes wrong, you are personally held responsible. Contracts can legally protect you if you can enforce the law but not absolve you on a personal basis. In short, it is better to have trust and friendship on your side than the law. All disputes should be avoided, and if you are forced into one, make sure it is settled amicably. What you loose on one deal, you can more than make up for on others. When contracts are signed, both parties should bear in mind that the agreement, although put in clear and firm terms, should be flexible to adapt to the growth of the business. Your Russian counterpart would expect you to be flexible and compensate him over and above what was agreed when business surpasses expectations as a fair gesture of good will for his initial support in creating this business. He is in a position to take it away from you, leaving you to challenge him through the courts, thus virtually closing all doors for further business in Russia. This alternative surely is not a smart option to pursue. On the plus side, the majority of business is done on a social handshake, once trust is established and maintained.
11. WOMEN PLAY A LARGE ROLE IN YOUR BOOK, HOW SO?
Women are always at the heart of what's going on, in families but also in business. Nowhere I have been was this as extreme as in Russia. If you want to know what a businessman or politician is all about over there, just ask his wife, girlfriend, or mistress. Russian women are very driven, very open, and very smart. It was through listening to their advice that I understood how things worked. I doubt that I would have succeeded there had I not valued their opinions and sought their help. By being based in Russia, I was able to develop stable relationships instead of fleeting encounters that visiting businessmen have with occasional girls on one night stands, a far cry from embracing and understanding the culture, learning the secrets of which is one of the few things not on sale in Russia.
12. WHERE ARE YOU OFF TO NEXT?
Morocco. Why? Because initially I intended to retire in Marbella, Spain. Then it became overbuilt and all the 'beautiful people' began to migrate to the tranquillity of Marrakesh and the scenic beauty of the Atlas mountains. I was there on a visit and liked it, and, at 67, I was beginning to feel bored once again and ready for a new adventure. The truth is that creating opportunities and developing new business is my way of life. The conveyer belt never stops…