Three of the most exciting Internet companies in Russia are run by women and all three chief executives spoke at NOAH, a conference in London on November 6th & 7th focused on late-stage Internet investment organized by Noah Advisors. Informilo interviewed the women about building big businesses in Russia.
It is not easy to stay ahead of the curve when you run the largest online retailer in Europe’s biggest and fastest-growing Internet market. Just ask Maelle Gavet, the chief executive of Ozon, Russia’s version of Amazon. Her mastery of this tough job has helped earn her a spot on the Forbes Global Women to Watch list.
Ozon posted sales of 8.87 billion rubles ($282 million) last year, an almost 80% jump from 2010. The growth rate has continued to soar, almost doubling in the second quarter to 7.1 billion rubles, not far from the figure that Ozon earned for all of 2011. The company, which doesn’t release profitability figures, is well on track to reach its target of $1 billion within three years.
Index Ventures and other investors took part in a $100 million investment round last year, capital Gavet is using to help Ozon achieve its goal of covering 5,000 sales points in every city in Russia with more than 50,000 inhabitants.
The key to becoming more and more efficient is to fine-tune processes. “That is hard to deal with when you’re growing quickly,” says Gavet. “Say you want to implement next-day deliveries. If everything is stable, all people in place are people that have been working with you for five years and you lay out a plan. But if your business is growing as fast as we are, then half the people around the table you didn’t have on staff a year ago.”
Gavet says she has adjusted her processes for decision-making twice over the last 18 months and that she will have to change again soon to keep up with the company’s growth. “What worked when you’re a company of 100 people doesn’t necessarily work when you’re a company of 500 people,” says the 34-year-old CEO. “It’s very challenging to make decisions on something that is moving so quickly, but it’s really exciting to be in such a demanding environment. You need a lot of drive, but I don’t think I could work in a peaceful business.”
Gavet left her native France and moved to Russia in 2001, launching Predstavitelskij Dom, an organizer of large corporate events. Two years later she went to work for Boston Consulting Group. After advising Ozon during her time at BCG she was offered a position as head of marketing in 2009 and told that she could become CEO if she did a good job. She obtained the top job a year later.
Gavet is the first to admit that staying on top is a continual struggle. “The most difficult thing, and what I find most exciting, is that you have to keep changing everything,” says Gavet. “I thought, for example, we’d create the perfect website and then we’d be set, but I realized that you keep having to redo it in what is a never-ending process. You always have to change and adjust in a country like Russia and a business like e-commerce. It’s exciting but exhausting.”
Annelies van den Belt (pictured on Informilo’s home page) knows how to manage media companies: she was the head of the broadband unit of Britain’s largest free-to-air commercial broadcaster, ITV. She spent a year and a half as the director of digital media for British newspaper group the Telegraph and four years as director of new media for the Times, another British media group. She also was publisher of the Moscow Times and worked in executive roles at the Russia Business Review and the St. Petersburg Times.
Fluent in Russian and global in outlook, she was a natural choice to head up SUP Media, one of Russia’s largest media companies, founded in Moscow in mid-2006 by American entrepreneur Andrew Paulson and Russian billionaire Alexander Mamut. Van den Belt got the call to build what was already a growing business and that is what she has done in the past four years with significant bumps in users and revenue. The company was profitable last year, the first time in its history, and is on track to repeat the feat this year.
SUP, based between Moscow, Kiev and San Francisco, owns Gazeta.ru, the online news service which has 8 million unique users per month, as well as several other popular sites including Russia’s top blogging and social media platform Livejournal.com and popular Russian sports website Championat.com. The company, which is owned byMamut, Kommersant Publishing House and its management,derives its revenues from advertisements, and e-commerce.
“I’ve always felt incredibly comfortable in Russia because the country is full of energy and a lot of things can be achieved if you have the right frame of mind and mentality,” says van den Belt, a native of Holland. “One of the reasons I think I do well in Russia is that I have lots of energy and I’m a glass half-full person. I love to build and there is still a lot to be built here. Russia is still so much the land of opportunity.”
All markets are exciting, when it comes to reinventing media, because there is so much to do in the digital space, she says. “It’s about spotting the opportunity in each market. That same mentality and skill set can be used in the UK, the Netherlands, Russia or wherever.”
That said, she is quick to add that in general Russian companies are more dynamic than their counterparts in western countries. “When you do marketing in Russia you don’t deal with agencies you have been working with for 25 years where the biggest thing on their agenda is the annual golf trip,” she says. “If we introduce a new technology there is genuine excitement to try new stuff rather than say let’s stay with what we had before. In digital media trying and testing are very strong elements. They are an important part of operations and of the strategic planning of the business.”
There are challenges, though, when working in a country with a different culture and van den Belt says her Dutch-British humor based on joking with colleagues is not always understood.
“They are learning how to take me,” she says. “You can’t be 100% serious all the time; it’s important to have a good time and have an outlet for pressure,” she says. “I came here after eight years in the UK where you try to make fun of people you work with, because it helps when the pressure is high. I think the Russians understand me now because I’m still here.”
Venturing Into The Fast Lane
Marina Treshchova has turned speed to market into an art form.
The CEO of incubator Fast Lane Ventures, Treshchova, along with partners Oskar Hartmann and Pascal Clement, is particularly adept at copying Western internet models and adapting them to the Russian market at an unprecedented clip. The incubator Treshchova heads has churned out more than 20 new Russian Internet start-ups in just a little over two years.
Fast Lane Ventures boasts that, on average, it takes 50 days to turn an idea into a fully operational business.
Some of those businesses have already found success, with Treshchova overseeing two significant exits for Fast Lane Ventures this year. The incubator sold sapato.ru, a Russian online shoe and accessory retailer that is similar to the U.S.’s Zappos, to Russian online retailer Ozon in February; shares in teleshopping channel Shopping Live were sold in April to Home Shopping Europe.
Other Fast Lane Ventures portfolio companies, which employ 800 people, cover online dating services, B2B sales, prepaid debit cards, healthcare media and online shopping.
Fast Lane Ventures has received more than $83 million in funding from Russian and international investors including Direct Group, e.ventures, Intel Capital, Mangrove Capital, UMJ Russia, Kinnevik and ru-Net. In its most recent round completed in April, Fast Lane Venturesreceived $18 million in funding from VTB Capital Venture Business and other investors. VTB may also in the future invest directly in some of the companies in Fast Lane Ventures’ ample portfolio.
Treshchova, who worked for a U.S. telecom company for six years and earned a B.A. in business and finance from the University of Washington, says she is glad she came back to her native country. “Russia is a good place for women to do business,” she says. If the job performances of Treschova,van den Belt and Gavet are an indication, that is very clearly the case.