In our inaugural blog post, we revisit an article that almost never was. Due to the deteriorating business climate in Russia in 2014 resulting from crippling economic sanctions, this article was commissioned by the business section of a major global affairs website, but then never published.
Business etiquette in Russia has undergone significant changes since the 1990s. We decided to talk with two long-term expats about the differences between doing business then and now.
Christian Courbois, 45, a North Carolina native, accidentally ended up in St. Petersburg in 1993 at age 25 after an attempt to travel around the world without money. “Coming to Russia in the wild 1990s inspired me to take a shot at cowboy capitalism,” he says. He started a small courier company with the aid of a credit card to serve expats frustrated with document delivery options. “There was no access to financing so one had to be creative,” he says. WESTPOST started turning a profit within a few months, growing from one courier and a secretary run out of his apartment to a serious business with an office and a small army of couriers within a few years.
Courbois says that he made every mistake imaginable. “But Russia was learning with me so it was an exciting time.” He considers one of his biggest blunders as not recognizing when it was time to take financing and a risk and take the business to the next level. He particularly misses the energy of the 1990s. “People were in love with business as a part of freedom, not as a cynical way to make money,” he says. “Everyone was equal. Everyone was starting from nothing.”
Courbois is introspective when considering how much things have changed for better or worse. “In many ways the excitement is gone,” he said. “Things have settled down. Competition has also come to every sector, a mixed blessing for businessmen, but very good for the consumer. It is harder for a small business to survive as margins shrink. It is more important to find a niche and focus on it.”
Dutch national Jerke Verschoor, 36, first came to Russia in 1999 at age 21 to study. “I was very ill prepared when I first arrived in 1999. I had no clue as to what life was really like. I was naïve. I figured it’s Russia, it must be cold. But, of course, it was summer when I arrived. It was warm and I was sweating.”
He finished his studies in Holland and came back to Russia in 2001, working for two years as a journalist. He met Charles Hoedt, future co-founder of In Your Pocket Russia, an English-language city guide. Hoedt gave Verschoor his first job in sales at the fledgling publication. Launched in 2003, In Your Pocket had to overcome a lot of hurdles in the beginning. “We were doing something rather new for the market,” he says. “Businesses were reluctant to even share opening times with us or their exact address. St. Petersburg already attracted many tourists, but the industry was not mature at all. Expats loved it, but it took some time to convince potential clients to advertise.”
He left In Your Pocket after a couple of years, but rejoined the team as Director of Sales and Strategy in 2012. The business has expanded significantly since its humble beginnings, adding a guide in Moscow and features on 15 other cities on its website. They currently print over 1,000,000 copies annually. “The competition came and went,” he says. “We are currently the biggest publisher of English-language city guides in Moscow and St. Petersburg. Clients call us now, not only the other way around.”
When asked what has changed, he replied, “It has become way more professional. That’s a fact. There’s less corruption at the lower levels. I barely see it anymore. Business is more regulated. People have started paying taxes. But still it’s a plus if you know people. It’s still a place where connections matter. If you know someone at another company then it will push you forward, much more so than in Europe.”
While certainly some western practices are more common, Verschoor thinks that not all of them are fully internalized. For example, if you need something by a strict deadline, you have to make it absolutely clear. “Russians tend to like to leave things until the last moment,” he said. “They work well under pressure and they’re willing to work long hours and this is everywhere. Take the Olympics. Outside of Russia everybody was worried that Russia wouldn’t get things done on time. But, in Russia everybody knew that it would be ready and it was. Russians like to do things on their own terms.”
Courbois remembers how holidays and gifts were key to doing business in Russia in the 1990s. “I used to spend a lot of time on presents and parties. This was important for the Soviet era partner. The younger generation realizes that this is an old fashioned farce.”
Verschoor agrees. “Young people are much more western. Most of these holidays originated in the Soviet Union and younger people have much less of a connection to that period. But, if you pull off a good March 8 celebration, you will be the most popular person in the whole company.”
Courbois and Verschoor have both been witness to the fits and starts of several crises in the Russian economy. But they have also been observers of a complete overhaul of a once shattered economy. And after many years each in Russia, neither has any intention of leaving soon. “There are a few kinks and specifics to Russia but overall the economy has grown up,” Courbois says. “Business works and people have become professional.”
WESTPOST can be found here. In September 2014 Verschoor moved on from In Your Pocket, where incidentally I was the Managing Editor of the Russian edition back in 2012-2013. He is now the Director at Nuffic Neso, the Netherlands Education Support Office, where I also write content and edit for their website. Charles Hoedt now holds the equivalent position in China, where I also edit and write content.