And why it is important to hold your horses after the first success and how short idling helps to make the right decision.
What are the drivers of the crisis and what has radically changed in your markets? What is the most serious challenge today?
Nothing has changed for us globally. These are just new circumstances that the business must be ready for constantly. Yes, there are companies that have felt more these two years. For example, ENESTECH focuses on the business of computer clubs. When they closed, the company lost. But the holding helped her survive difficult times. Not every company in this segment could even wait. On the contrary, we have strengthened development and added new directions of development. Thus, ENESTECH has the prospect of becoming the #1 product worldwide.
TECHIIA is a well-distributed holding company in relation to industries and territories. Therefore, in general, we are always stable. Of course, we are not happy with the crisis, but due to its structure in such periods, we get more opportunities than problems.
Can you afford to act boldly as an entrepreneur? Were there any risky projects that helped you win over competitors? What projects do you consider as the key ones?
This is another advantage of holding with a large number of companies. Some projects, such as our Culver Aviation drones, require a deliberate selection of partners and agreements. And there are businesses for which there is no market as such, so we need to act boldly.
We still can and love to take risks. But, like any big business, we allocate a certain percentage of funds for such operations. As an investment portfolio. Some investments are risky, but their stocks are profitable. Others, the "blue chips", are companies with large investments and small but stable profits. In this way, we diversify our risks and survive regardless of the circumstances.
Regarding projects. During the first lockdown, our company WePlay Esports could not hold offline tournaments, so we had to change our approach instantly. While everyone was waiting for the end of the pandemic, from the first month we started holding online tournaments, including charity tours, bringing in talent and cyberathletes. New protocols were developed in the arenas and studios, and everyone was regularly tested for the COVID.
Thanks to the new safety standards, no one got sick. Did we take a risk? Of course. In the end, we quadrupled the amount of content for viewers in a year and rushed forward. In 2021, we were entrusted with the world's top events — and everyone understood that the risk was paid off. Every company has such a key project.
What competencies should a manager have who is increasingly hindered by global "black swans"? What will be considered a criterion for the right decision? Why should intuition or analytics be trusted in an unpredictable situation? After all, none of the economists predicted the coronavirus.
It is unlikely that the criterion of the right decision will change over time to something other than the result of this decision. I can't draw a clear line between intuition and analytics. 99% rely on intuition, the ability to feel a certain air around. But this does not mean that the decision comes to mind from space. Intuition is a mixture of constant work with information, learning other businesses, experience, memory features, and background analysis, the nature of which will one day be revealed.
As for the "black swans", it seems to me that their influence is overestimated. Unpredictable events happen every day. They can have fatal consequences for business or can be a springboard to a new level. The difference is whether you can make money on them or not.
As for the "black swans", it seems to me that their influence is overestimated. Unpredictable events happen every day.
Back in the analog era, the manager was concentrated on the activities of the company, each of its departments. Rigidity, the ability to clearly build a plan and execute it was primary. The modern manager — digital leader — is mostly a diplomat and strategist who needs other qualities to succeed. Which exactly?
The first is restraint, especially after the first big money and success. Unfortunately, many of my friends were morally marred by money.
Once I was learning to fly a helicopter. After my next virtuoso landing, the instructor asked, “How cool was that? Do you feel like a god in heaven? ” When he saw my sparkling eyes, he said, "At times like this you have to take a break from flying for several months because such a feeling comes up a week before you crash." That’s why restraint is a must.
The second quality is the ability to break the limits in your head and think beyond one's own knowledge and experience.
The third is energy. It's hard to be a leader if you can't get out of bed and are sometimes unwilling to devote some of your energy, time, and health to it. I consider myself lazy. But when I need to get together, I joke that I do more in a day than a medium-sized company does in a year. The decision-making speed increases, however, along with the number of sleepless hours.
I agree that a leader is first and foremost a strategist and diplomat because modern large business is international and long-term focused. And the authoritarian function of a man with a whip can be performed by the average salary manager. This is not a high-level skill.
When companies in the same industry sell about the same products or provide similar services, are there any proven leadership algorithms? How have these companies become and remain market leaders?
There are no proven leadership algorithms. Only routine repetitive actions and business processes can be automated. The key competencies of the entrepreneur are flexibility and reaction speed. You can't put them into some formula because it's against their nature.
Entrepreneurship, like life in general, is a continuous experiment. Just like in an experiment, you have hypotheses, but you never know the result beforehand. You gather a lot of curiosity, intuition, experience, observation, environment, and just make your move. Not once, but every day, because hundreds of millions of entrepreneurs, who live on the same planet, are also making their moves.
I think we have been and remain bold enough to take risks and create what others do not dare or underestimate. And we draw conclusions from experiments so as not to make the same mistake again.
Today, some experts call for the restoration of the country's industrial potential, up to the Soviet level, others — to jump into the post-industrial future (technology and information projects), and others believe in Ukraine as an agricultural superpower. What does Ukraine need now and why?
Fortunately, Ukraine understands that our talents can give a technological advantage to the whole world. I think all the experts will agree that we need to change the raw material model to a production model as soon as possible, no matter what industry it is. To create here and to sell worldwide.
Read the book "The Experience Economy". The authors use the example of coffee to show how its price changes depending on what the businessman sells: raw beans, a pack in a supermarket, a cup of coffee in a fast-food restaurant, or a five-star restaurant. From raw materials to experience. And the closer it is to the second, the more expensive it is.
We implement this principle in TECHIIA, and we work in different segments. For example, our WP Merchandise! factory produces licensed merch based on computer games and comic books, ENESTECH develops the best software for the administration of LAN gaming centers, WePlay Esports creates and delivers outstanding esports tournaments.
One example of added value is Culver Aviation, which creates unmanned aerial vehicles for the rapid collection and analysis of data from the surface of the earth. We started by just selling drones. But UAVs do not live long in incompetent hands. Such drones, in contrast to helicopters, are much more difficult to operate. Therefore, we have changed the model and instead of the aircraft itself, we offer a monitoring service: our specialists will fly over the territory, transform and analyze the collected information. The customer needs a solution, not just a device — and this is our focus.
Trump said, "Don’t go on a vacation. What’s the point of it? If the work is no fun — you work at the wrong place. And I, even playing golf, keep doing business." Do you agree with him?
If I'm not mistaken, during his presidency, Mr. Trump repeatedly took golf vacations but did not call them vacations. And seriously, you don’t come up with many business decisions in the office, but during training or lunch. Sometimes I even get struck with an insight in the middle of the night. There are scientific studies about the benefits of short inactivity: the brain uses it to sort, clean up the excess, process the important.
In general, a person who does not know how to rest, works very poorly. I had a crazy period — three years without days off, sick leave, or even vacations. If there was a temperature, I would beat it with pills. Until my body decided to take a three-day break. When I slept well, I realized how many bad decisions I had made during my race.
You don’t come up with many business decisions in the office, but during training or lunch
How immersed are you in the operational management of the company? What percentage do you delegate to your subordinates? What are your benchmarks?
When it comes to managing the holding, we have given about a third of the decision-making power to the board of directors. The rest is managed by me and my partner Yura Lazebnikov.
In some companies, the share of independence reaches 90%. The CEO decides everything himself/herself — from team bonding activities to the intricacies of product promotion. They reach us only if changes in funding are needed during the year. For example, our FS Holding recently received an exclusive license for the production and distribution of merch in Europe and the CIS from the American video game developer and publisher Blizzard. To increase sales, the CEO asked for an additional budget that we’ve approved.
Regarding benchmarks, the best is the regular exchange of information with the board of directors and numbers. Each of us is responsible for a specific area. If one direction starts messing up, others help. We have well-distributed roles and covered sectors.
Peter Thiel, the co-founder of PayPal, senior partner of the Founders Fund, and president of Clarium Capital, seeks to hire only those candidates who are not afraid to say what they think. Are you ready to take such contenders? What question do you ask at the interview for a senior executive position in your company?
In fact, most of our managers grew up within our companies. There is no more valuable leader than the one whose experience I have witnessed, with whom I share values, who has been with me not only at times of success but also when some projects, areas, or entire companies had to be closed. We choose people who are able to really assess the situation, boldly communicate their views, those professionals who do their job better than us.
I do not have a specific questionnaire for external candidates or projects in which TECHIIA invests. Live conversations about experience, teamwork, mistakes, and conclusions are the best way to understand who is in front of you.
How do you act under pressure? What to do when you have no special training — to think more or make a decision faster? What is closer for you — to dive right into it or make a detailed action plan before that?
I prefer flexibility, given the circumstances. For business, it is deadly to get stuck in one of the extremes. For example, in times of crisis, any plan can fail, so you need to act quickly, fall, get up, act again. This opens up more opportunities.
An analysis on Reuters stated that in 2020, the shares of the 400 largest companies run by the founders rose by an average of 60%. At the same time, companies with hired managers have grown six times less. Founders are more willing to take risks, to make sharp tactical turns, and this significantly helps their businesses in turbulent times. We at TECHIIA felt it to the fullest.
But, as you said, for today's big business, strategy is above all. Thus, long-term planning, systematization, distribution of efforts, and competent preparation for possible turbulence.
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