From Russia With Trust
By Rob Orchard, Co-founder and editorial director of the Slow Journalism Company
Entrepreneur and investment banker Alexey Goryachev has spent more than 25 years spotting and capitalizing on business opportunities from his base in Moscow, Russia. He shares his thoughts on the state of the market and the opportunities for entrepreneurs in his home country.
When YPO member Alexey Goryachev entered the business world as a student in Russia in the early 1990s, it was a challenging environment. “I wanted to set up my own company,” he says, “But how? I had no money, no connections. And just to remind you, we had been living in a socialist country for 70 years. The Soviet Union had only recently collapsed, so there were no angel investors around.” It was a precarious moment: the political situation was unstable, the country’s infrastructure was in dire need of investment and the population had limited resources and no experience of consumer capitalism.
Undaunted, Goryachev gained experience helping to set up the new Moscow stock exchange. He used the insights he gathered to hone the idea of an investment company, which he pitched to anyone who would listen. “Eventually I found my future partners, the owners of one of the first Russian joint ventures with the West,” he says. “I brought my best friend with me and we did a presentation about the new opportunities on the emerging [Russian] financial markets. I asked for 60 percent for us in the new venture on the basis of our expertise of doing business in a totally new sphere. We agreed on 50-50.” Goryachev is a man who likes to make opportunities happen. “I kicked the door open into my career,” he says.
The human factor
Scroll forward 23 years, and Goryachev is Co-Owner and Managing Partner of RB Partners, the leading private investment bank in Russia. He sold his original investment company, RMG Partners, in 2014 but — not being one to rest on his laurels or retire to a private island to gloat in the sunshine — continued to work hard. An average day starts with a 10-kilometer (6.2 mile) run around the Kremlin, followed by up to 12 hours of meetings, pitches and presentations. The dedication pays off: for three years his bank has been ranked No. 1 in “Forbes” Russian investment banks ranking, thanks to the quality of its research.
When it comes to evaluating investment and acquisition opportunities, Goryachev’s got a checklist of things he wants to see. “We need a big opportunity in a fast-growing sector, a clear business model, a proven market, reality-checked financials, a lasting competitive edge and a real problem to solve,” he says. But ultimately, crunching the numbers only gets you so far. “I always start from the people,” says Goryachev. “You might think it’s about money but it’s always about people. It’s people who nail it or screw it. The human factor is the most important: I look for people with inner integrity and stamina.”
For YPO members looking in on Russia from the outside, the biggest barriers to overcome might seem to be the regulatory environment and an economic climate shaped by sanctions imposed by the West. Not so, says Goryachev. “The lack of trust and management skills is more important,” he says. It’s something he’s trying to address through the YPO Moscow Chapter. “We’re trying to spread the YPO safe-haven of trust and building relationships. We try to help people look for win-win results in their business negotiations, to find a solution which works for both sides. I think that businesspeople in Russia don’t always understand how much value trust allows them to create.”
Cultivating the next generation
Goryachev devotes significant amounts of time to mentoring young entrepreneurs, sharing the lessons he learned both through his own experiences at RMG Partners and RB Partners and from his time studying at Harvard Business School in 2016. “You just change the way they perceive the business processes and themselves, and help them to dream big,” he says. “You show them that they can be very successful, not just in Russia but also globally.”
A natural optimist, Goryachev believes that it is the flaws in the Russian business environment that make it exciting. “The best thing is that nothing is perfect here,” he says. “Russia, for now, is a real land of opportunities: whatever you do, you can find something which is imperfect and try to make it more perfect.” His tips for industries to watch in the country? “Artificial intelligence, the blockchain, the “internet of things,” virtual reality. Then space, energy — and even farming, a very conservative industry, but one which is changing very fast with the help of technology.”
If you’re feeling tempted to put a toe in the Russian market, Goryachev has some simple advice for you. “Find a trustworthy partner with a win-win mindset, one who can open doors for you,” he says. “And remember — build trust first, then build the business.”